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2015 Annual Report

Freeport-McMoRan Inc. (FCX) is a natural resources company with headquarters in Phoenix, Arizona.
FCX operates large, long-lived, geographically diverse assets with significant proven and probable
reserves of copper, gold, molybdenum, cobalt, oil and natural gas. FCX is the world’s largest publicly
traded copper producer, the world’s largest producer of molybdenum, and a significant gold, oil and
natural gas producer.

FCX’s portfolio of metal assets includes the Grasberg minerals district in Indonesia, one of the world’s
largest copper and gold deposits; significant mining operations in North and South America, including
the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru; and the Tenke
Fungurume minerals district in the Democratic Republic of Congo.

FCX’s portfolio of oil and natural gas assets includes growth potential in the Deepwater Gulf of Mexico,
established oil production facilities onshore and offshore California, large onshore natural gas resources
in the Haynesville shale in Louisiana, natural gas production from the Madden area in central Wyoming,
and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in South Louisiana.

During 2015, FCX took actions to enhance its financial position in response to lower market prices for
its primary commodities. Current market conditions and uncertainty about the timing of economic and
commodity price recovery requires FCX to continue taking actions to strengthen its financial position,
reduce debt and re-focus its portfolio of assets. FCX’s business strategy is focused on its position as
a leading global copper producer. FCX will continue to manage its production activities, spending on
capital projects and operations, and the administration of the business to enhance cash flows.

Additional information about FCX is available at fcx.com.

SUMMARY FINANCIAL HIGHLIGHTS

YEARS ENDED DECEMBER 31, 2015 2014 2013 2012 2011

(In millions, except per share amounts)
Revenues $ 15,877 $ 21,438 $ 20,921 $ 1 8,010 $ 20,880
Operating (loss) income (13,382)* 97* 5,351 5,814 9,140
Net (loss) income attributable to FCX
common stockholders (12,236)* (1, 308)* 2,658 3,041 4,560
Diluted net (loss) income per common share (11.31)* (1. 26)* 2.64 3.19 4.78
Dividends declared per common share 0.2605 1.25 2.25 1.25 1.50
Operating cash flows 3,220 5,631 6,139 3,774 6,620
Capital expenditures 6,353 7,215 5,286 3,494 2,534

At December 31:
Cash and cash equivalents 224 464 1,985 3,705 4,822
Total assets 46,577 58,674 63,385 35,421 32,038
Total debt, including current portion 20,428 18,849 20,618 3,508 3,505
Total stockholders’ equity 7,828 18,287 20,934 17,543 15,642

* Includes charges to reduce the carrying value of oil and gas properties totaling $13.1 billion ($11.6 billion to net loss
attributable to common stockholders or $10.72 per share) in 2015 and $3.7 billion ($2.3 billion to net loss attributable to
common stockholders or $2.24 per share) in 2014.
 RICA RICA
H AM E I H AM E E R D E E S IA A
N O R T
E NC S O U T V I N D O N S B E RG AF R I C KE
MOR C E R RO GR A TE N U R U M E
FU NG

PROVING
OUR METTLE
The people of Freeport-McMoRan,
who provide vital resources to
the global economy, are united in
a spirit of resolve to execute our OF
TABLE TE NTS
business plans in a volatile market. CON
Our positive long-term view of our 2 Operations

industry is underpinned by our 4 Letter to Our Shareholders

6 Operational Overview
portfolio of exceptional assets,
13 Reserves
including the four world-class  14 Financial Performance

copper mines pictured above. 15 Sustainable Development

 16 Board of Directors and Management

17 Financial and Operating Information

136 Performance Graph

137 Stockholder Information

2015 ANNUAL REPORT 1

 OPERATIONS

Madden, Wyoming
Henderson, Colorado

California Climax, Colorado

Haynesville, Louisiana

Gulf of Mexico Shelf

Deepwater Gulf of Mexico

Morenci, Arizona Tyrone, New Mexico

Sierrita, Arizona Chino, New Mexico

Bagdad, Arizona

Safford, Arizona

Miami, Arizona
Cerro Verde, Peru

El Abra, Chile

MINING

NORTH AMERICA SOUTH AMERICA INDONESIA AFRICA CONSOLIDATED TOTALS

RESERVES Cu 33.5 billion lbs Cu 30.8 billion lbs Cu 28.0 billion lbs Cu 7.2 billion lbs Cu 99.5 billion lbs
AT Au 0.3 million ozs Mo 0.67 billion lbs Au 26.8 million ozs Co 0.9 billion lbs Au 27.1 million ozs
12/31/15 Mo 2.38 billion lbs Mo 3.05 billion lbs
Co 0.9 billion lbs

2015 Cu 2.0 billion lbs Cu 0.9 billion lbs Cu 0.7 billion lbs Cu 0.5 billion lbs Cu 4.1 billion lbs
SALES Mo 89 million lbs* Au 1.2 million ozs Co 35 million lbs Au 1.25 million ozs
Mo 89 million lbs
Co 35 million lbs

* Includes sales of molybdenum produced at FCX’s North and South America copper mines.
Note: lbs=pounds; ozs=ounces; MMBbls=million barrels; Bcf=billion cubic feet; MMBOE=million barrels of oil equivalents.

2 F reeport -M c M o R an
 OPERATIONS

Grasberg, Indonesia

Tenke Fungurume, Democratic Republic of Congo

Copper (Cu)
OIL AND GAS
Gold (Au)
UNITED STATES
Oil 310 MMBbls Molybdenum (Mo)
Natural Gas 350 Bcf
Natural Gas Liquids 14 MMBbls Cobalt (Co)
MMBOE 381
Oil
Oil 35.3 MMBbls
Natural Gas 89.7 Bcf Natural Gas
Natural Gas Liquids 2.4 MMBbls
MMBOE 52.6

2015 ANNUAL REPORT 3

 TO OUR SHAREHOLDERS
“Proving our Mettle” captures our resolve to execute our clearly defined
plan and to position Freeport-McMoRan for long-term success. We
are positive and optimistic about our company’s long-term future,
underpinned by a portfolio of exceptional assets and a highly motivated
management team and workforce focused on executing our strategy.
The long-term outlook for copper is bright, supported by limited global
supplies and copper’s important role in the world’s economy. We are
realistic about the current economic environment and near-term risks
facing our business. During 2015, we took aggressive actions to reduce
costs and capital expenditures. We achieved significant cost reductions
and structured our mining operations to generate free cash flow at copper
prices near six-year lows.
Our Board of Directors made the tough decision during 2015 to
suspend our common stock dividend and to raise equity to protect our
balance sheet. We also sharpened our focus through reconstituting and
reducing the size of our Board, streamlining our executive management
to enhance accountability and electing a non-executive Chairman. Our
Board currently includes eight independent members and our CEO.
The Board represents a strong blend of institutional knowledge and
fresh perspectives that will benefit shareholders as we address market
challenges and position the company for long-term success.
Our Board has adopted a clearly defined strategy of focusing on our
leading global position in the copper industry. A key strength of our
company is our organization’s ability to develop and safely operate
properties around the world. During 2015, we achieved a number of
important milestones. In Arizona, the new concentrating facility at
Morenci reached full rates. In Peru, we completed the construction of
the world’s largest concentrating facility at Cerro Verde, positioning
Photo: Morenci is the largest
copper mine in North America
4 F reeport -M c M o R an
the mine to be a major large-scale producer for decades. In Indonesia,
we received important assurances from the Government of Indonesia
regarding our long-term operating rights. And in Africa, exploration
results at our Tenke Fungurume mine continue to indicate opportunities
for significant future reserve additions. Our mining assets are
characterized by high volumes of low-cost current production, with
large mineral reserves and resources available for future development
and growth.
As we enter 2016, our immediate focus is to restore strength to our
balance sheet. In addition to cutting costs, we have announced plans to
sell assets and to maximize cash flows from operations to repay debt. In
February 2016, we announced an important first step with an agreement
to sell an interest in our Morenci mine for $1 billion in cash. We expect
to report additional progress on our divestiture plans during 2016. While
these actions will reduce our asset base, they are being pursued with an
objective to enhance shareholder value. We expect to retain a high-
quality portfolio of long-lived assets and a strong competitive position
within the global copper industry.
Our Board is engaged in a strategic review of our oil and gas business.
FM O&G’s high-quality asset base, substantial underutilized
Deepwater Gulf of Mexico infrastructure and large inventory of low-risk
development opportunities provide alternatives to generate value. The
value of these assets has significant leverage to the price of oil.
The safety of the men and women in our over-75,000-member workforce
continues to be our highest priority. We are pleased to report continued
improvement in our incident rate during 2015. Regrettably, three fatal
injuries occurred in 2015, including two at our Grasberg operations
in Indonesia and one at out Cerro Verde operations in Peru. Fatality
 LETTER TO OUR
SHAREHOLDERS

prevention in our global operations continues to be a critical focus of

our management team, with particular focus on our critical risk
control framework.
We are optimistic about
At the end of 2015, James R. “Jim Bob” Moffett stepped down from our company’s long-term
the Board and as Executive Chairman. We thank Jim Bob for his future, underpinned by a
contributions and dedicated service over his 50-year career in the natural
resource industry. portfolio of exceptional
As we execute our business plans in this volatile market, our employees assets and a highly
continue to demonstrate unwavering and relentless resilience. We
motivated management
appreciate their strong focus, hard work and diligence as we adjust our
business to be responsive to the current economic environment. We team and workforce
would also like to thank our Board for their service, support and counsel
focused on executing our
during this important period.
strategy.
Copper has a bright future and, by working together, our global team
will be successful in “Proving our Mettle.”

Respectfully yours,

GERALD J. FORD RICHARD C. ADKERSON

Non-Executive Chairman Vice Chairman of the Board,
of the Board President and Chief Executive Officer

April 6, 2016

2015 ANNUAL REPORT 5

OPERATIONAL
OVERVIEW

CONSOLIDATED RESULTS

FCX’s consolidated copper sales of 4.1 billion pounds (average realized price
of $2.42 per pound) for 2015 were higher than sales volumes of 3.9 billion
pounds (average realized price of $3.09 per pound) for 2014, primarily reflecting
increased production from the Morenci expansion, higher ore grades at the
Chino mine and higher mill throughput at the Grasberg mine, partly offset by
lower volumes from South America as a result of the sale of the Candelaria and
Ojos del Salado mines in 2014. Consolidated copper sales for 2016 are expected
to increase to approximately 5.1 billion pounds, reflecting increased production
from the Cerro Verde expansion and higher ore grades from the Grasberg mine.

Consolidated gold sales totaled 1.25 million ounces (average realized price of
$1,129 per ounce) for 2015 and 1.25 million ounces (average realized price of
$1,231 per ounce) for 2014, and are expected to increase to approximately
1.8 million ounces in 2016, reflecting higher grades from the Grasberg mine.

Consolidated molybdenum sales totaled 89 million pounds (average realized

price of $8.70 per pound) for 2015 and 95 million pounds (average realized
price of $12.74 per pound) for 2014, and are expected to approximate 73 million
pounds in 2016.

Oil and gas sales volumes of 52.6 MMBOE (144 thousand barrels of oil
equivalents (MBOE) per day) at an average realized price of $43.54 per BOE
for 2015 were lower than sales volumes of 56.8 MMBOE (156 MBOE per day)
at an average realized price of $71.83 per BOE for 2014, primarily reflecting the
sale of the Eagle Ford shale assets in 2014, partly offset by higher volumes in
the Gulf of Mexico (GOM). Oil and gas sales volumes for 2016 are expected to
approximate 57.6 MMBOE (158 MBOE per day).

CONSOLIDATED UNIT CASH COSTS

Unit net cash costs for
2015 2016e*
2016 are expected to Mining (per lb of copper)

decline significantly from

Site Production and Delivery $ 1.78 $ 1.34
By-product Credits (0.47) (0.46)

2015, principally reflecting Treatment Charges 0.16 0.18

Royalties and Export Duties 0.06 0.04
higher anticipated copper Unit Net Cash Costs $ 1.53 $ 1.10

and gold volumes, the Oil and Gas (per BOE)

Cash Production Costs $ 18.59 $ 15.00
impact of lower energy
and other input costs, and
*E
 stimates assume average prices of $1,100/oz for gold, $4.50/lb
for molybdenum and $10/lb for cobalt for 2016. Quarterly unit
costs will vary significantly with quarterly metal sales volumes.
cost reduction initiatives. Consolidated unit net cash costs for 2016 would change by
approximately $0.015/lb for each $50/oz change in the average
price of gold and $0.015/lb for each $2/lb change in the
average price of molybdenum.

Note: Throughout this

annual report, e=estimate.
6 F reeport -M c M o R an
 CONSOLIDATED
COPPER SALES
in billion lbs

5.0

4.0

3.0

2.0

1.0

2015 2016e

CONSOLIDATED
GOLD SALES
in million ozs

2.0

1.5

1.0

0.5

2015 2016e

CONSOLIDATED
MOLYBDENUM SALES
in million lbs

100

80

60

40

20

2015 2016e

CONSOLIDATED
OIL AND GAS SALES
MMBOE

60

45

30

15

2015 2016e

Photo: A new concentrator at the Cerro Verde mine in Peru will expand
production from 120,000 metric tons of ore per day to 360,000 metric
tons of ore per day and provide incremental annual production of 2015 ANNUAL REPORT 7
approximately 600 million pounds of copper
OPERATIONAL
OVERVIEW

The Morenci mill expansion

project successfully achieved
full rates in second-quarter
2015.

NORTH AMERICA UNIT CASH COSTS

per lb of copper
NORTH AMERICA MINING

2015 2016e* FCX leads the North America metals industry in the production of
UNIT CASH COSTS copper and molybdenum. In North America, FCX operates seven
Site Production and Delivery $ 1.68 $ 1.43
open-pit copper mines—Morenci, Bagdad, Sierrita, Safford and
By-product Credits (0.13) (0.04)
Treatment Charges 0.12 0.10 Miami in Arizona, and Chino and Tyrone in New Mexico, and two
Unit Net Cash Costs $ 1.67 $ 1.49 molybdenum mines—Henderson and Climax in Colorado. Certain

*E
 stimates assume an average price of $4.50/lb for
of FCX’s North America copper mines also produce molybdenum
molybdenum for 2016. Unit net cash costs for 2016 concentrate and silver.
would change by approximately $0.02/lb for each
$2/lb change in the average price of molybdenum. FCX has significant undeveloped reserves and resources in North
America and a portfolio of potential long-term projects. In response
NORTH AMERICA COPPER to lower commodity prices, FCX is deferring development of new
RESERVES BY MINE
33.5 billion lbs projects in the near-term. FCX has also revised operating plans for
the North America copper mines to incorporate reductions in mining
rates to reduce operating and capital costs, including the suspension
36% Morenci
of mining operations at the Miami mine, suspension of production
30% Sierrita
at the Sierrita mine, a 50 percent reduction in mining rates at the
23% Bagdad
Tyrone mine, and adjustments to mining rates at other copper mines.
11% Other
FCX’s revised operating plans for the molybdenum mines primarily
reflect an approximate 65 percent reduction in projected annual
production volumes from the Henderson mine.

North America’s consolidated copper sales of 2.0 billion pounds

(average realized price of $2.47 per pound) in 2015 were higher
NORTH AMERICA NORTH AMERICA
COPPER SALES MOLYBDENUM SALES* than sales of 1.66 billion pounds (average realized price of $3.13 per
in billion lbs in million lbs pound) in 2014, primarily reflecting higher mining and milling rates
at Morenci and higher ore grades at Morenci, Chino and Safford.
2.0 100
FCX expects copper sales from its North America copper mines to
80
1.5
approximate 1.8 billion pounds in 2016.
60
1.0 Consolidated molybdenum sales totaled 89 million pounds in 2015
40
0.5
and 95 million pounds in 2014. FCX expects molybdenum sales to
20
approximate 73 million pounds in 2016.

2015 2016e 2015 2016e

* I ncludes sales of molybdenum produced at FCX’s

North and South America copper mines.

8 F reeport -M c M o R an
 OPERATIONAL
OVERVIEW

SOUTH AMERICA MINING

FCX operates two copper mines in South America—Cerro Verde in

Peru and El Abra in Chile. In addition to copper, the Cerro Verde
mine produces molybdenum concentrate and silver.

The Cerro Verde expansion project commenced operations in

September 2015 and is currently operating at full rates. The project
included expanding the concentrator facilities from 120,000 metric
tons of ore per day to 360,000 metric tons of ore per day and is
expected to provide incremental annual production of approximately
600 million pounds of copper and 15 million pounds of molybdenum.

In response to lower commodity prices, FCX has revised operating
plans for the South America mines. These principally reflect
adjustments to the El Abra mine plan to reduce mining and stacking
rates by approximately 50 percent to achieve lower operating and
labor costs, defer capital expenditures and extend the life of the
existing operation.
Consolidated copper sales from FCX’s South America mines of
871 million pounds (average realized price of $2.38 per pound) in
2015 were lower than sales of 1.14 billion pounds (average realized
*E
price of $3.08 per pound) in 2014, primarily reflecting the November
SOUTH AMERICA UNIT CASH COSTS
per lb of copper
2015 2016e*
UNIT CASH COSTS
Site Production and Delivery $ 1.60 $ 1.31
By-product Credits (0.05) (0.06)
Treatment Charges 0.1 9 0.24
Royalty on Metals — 0.01
Unit Net Cash Costs $ 1.74 $ 1.50
 stimates assume an average price of $4.50/lb for
molybdenum for 2016.

2014 sale of the Candelaria and Ojos del Salado mines and lower ore
grades at El Abra, partly offset by higher mining and milling rates at SOUTH AMERICA COPPER
RESERVES BY MINE
Cerro Verde. FCX expects copper sales from its South America mines
30.8 billion lbs
to approximate 1.3 billion pounds in 2016.

Cerro Verde
92% 
El Abra
8% 

In 2015, FCX completed

construction of the world’s SOUTH AMERICA
COPPER SALES
largest concentrating in billion lbs

facility at Cerro Verde, 1.5

positioning the mine to 1.0

be a major large-scale
0.5
producer for decades.
2015 2016e

2015 ANNUAL REPORT 9

 OPERATIONAL
OVERVIEW

INDONESIA MINING

Through its subsidiary, PT Freeport Indonesia (PT-FI), FCX mines

one of the world’s largest copper and gold deposits in the Grasberg
minerals district in Papua, Indonesia. In addition to copper and gold,
PT-FI produces silver.

The Grasberg minerals district has three operating mines: the

Grasberg open pit, the Deep Ore Zone underground mine and the
Deep Mill Level Zone underground mine. The Grasberg minerals
district also includes the developed Big Gossan underground mine,
INDONESIA UNIT CASH COSTS
where operations are currently suspended. PT-FI also has several
per lb of copper
projects in progress in the Grasberg minerals district related to the
2015 2016e* development of large-scale, long-lived, high-grade underground ore
UNIT CASH COSTS bodies. In aggregate, these underground ore bodies are expected
Site Production and Delivery $ 2.39 $ 1.15 to produce large-scale quantities of copper and gold following the
Gold and Silver Credits (1.91) (1.38)
Treatment Charges 0.31 0.28
transition from the Grasberg open pit.
Export Duties 0.15 — In response to lower commodity prices, PT-FI has revised its
Royalty on Metals 0.15 0.12
operating plans to incorporate improved operational efficiencies,
Unit Net Cash Costs $ 1.09 $ 0.17
reductions in input, supplies and contractor costs, foreign exchange
*E
 stimates assume an average price of $1,100/oz for gold
for 2016. Unit net cash costs for 2016 would change by
impacts and a deferral of 15 percent of capital expenditures that had
approximately $0.06/lb for each $50/oz change in the been planned for 2016.
average price of gold. Also excludes Indonesian export
duties, which are under discussion with the government
Consolidated sales from Indonesia mining of 744 million pounds of
of Indonesia.
copper (average realized price of $2.33 per pound) and 1.2 million

INDONESIA COPPER RESERVES ounces of gold (average realized price of $1,129 per ounce) in 2015
BY MINE were higher than sales of 664 million pounds of copper (average
28.0 billion lbs realized price of $3.01 per pound) and 1.17 million ounces of gold
(average realized price of $1,229 per ounce) in 2014, primarily
6% Open Pit reflecting higher mill rates, partly offset by lower ore grades.
94% Underground FCX expects sales from Indonesia mining to increase to 1.5 billion
pounds of copper and 1.8 million ounces of gold in 2016 as a result
of higher ore grades in the second half of the year.

PT-FI expects ore grades

INDONESIA COPPER INDONESIA GOLD
SALES SALES to improve significantly in
in billion lbs in million ozs
the second half of 2016
1.5 2.0
1.2
because of access to
0.9
1.3
higher-grade sections
0.6
0.7 of the Grasberg open
0.3
pit, resulting in higher
2015 2016e 2015 2016e production and lower unit
10 F reeport -M c M o R an net cash costs.
 OPERATIONAL
OVERVIEW

Exploration results at the

Tenke Fungurume minerals
district continue to indicate
opportunities for significant
future potential reserve
additions.

AFRICA MINING
AFRICA UNIT CASH COSTS
Through its subsidiary, Tenke Fungurume Mining S.A. (TFM), per lb of copper
FCX operates the copper and cobalt mining concessions in the
Tenke Fungurume minerals district in the Southeast region of the 2015 2016e*
UNIT CASH COSTS
Democratic Republic of Congo.
Site Production and Delivery $ 1.58 $ 1.63
TFM completed its second phase expansion project in early 2013, Cobalt Credits (0.42) (0.35)
Royalty on Metals 0.05 0.04
which included increasing mine, mill and processing capacity,
Unit Net Cash Costs $ 1.21 $ 1.32
and construction of a second sulphuric acid plant is substantially
complete. FCX continues to engage in exploration activities  stimates assume an average price of $10/lb for cobalt
*E
for 2016. Unit net cash costs for 2016 would change by
and metallurgical testing to evaluate the potential of the highly approximately $0.09/lb for each $2/lb change in the
average price of cobalt.
prospective Tenke Fungurume minerals district. Future development
and expansion opportunities are being deferred pending improved
AFRICA COPPER RESERVES
market conditions. 7.2 billion lbs

Consolidated sales from Africa mining of 467 million pounds of

copper (average realized price of $2.42 per pound) and 35 million
pounds of cobalt (average realized price of $8.21 per pound) in 2015 100% Tenke
Fungurume
were higher than sales of 425 million pounds of copper (average Minerals
realized price of $3.06 per pound) and 30 million pounds of cobalt District

(average realized price of $9.66 per pound) in 2014. Higher copper

sales volumes primarily reflected timing of shipments, and higher
cobalt sales volumes reflected higher ore grades. FCX expects sales
from Africa to approximate 495 million pounds of copper and
35 million pounds of cobalt in 2016. AFRICA COPPER AFRICA COBALT
SALES SALES
Photo: High-grade copper and cobalt ore at the Tenke Fungurume mine in the
Democratic Republic of Congo in billion lbs in million lbs

0.5 40

0.4
30
0.3
20
0.2

0.1 10

2015 2016e 2015 2016e

2015 ANNUAL REPORT 11

 OPERATIONAL
OVERVIEW
FM O&G’s high-quality
asset base, substantial
underutilized Deepwater
Gulf of Mexico
infrastructure and large
OIL AND GAS OPERATIONS
inventory of low-risk
Through its wholly owned subsidiary, FCX Oil & Gas Inc. (FM O&G),
FCX has a portfolio of oil and gas assets that includes oil production
development opportunities
facilities and growth potential in the Deepwater GOM, established provide alternatives to
oil production facilities onshore and offshore California, large onshore generate value.
natural gas resources in the Haynesville shale in Louisiana, natural gas
production from the Madden area in central Wyoming, and a position
in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in
South Louisiana.

FCX continues to take actions to reduce oil and gas costs and capital
expenditures, including undertaking a near-term deferral of exploration
and development activities by idling the three Deepwater GOM drill-
ships FM O&G has under contract.

Oil and gas sales volumes of 52.6 MMBOE (144 MBOE per day) at
an average realized price of $43.54 per BOE for 2015 were lower than
sales volumes of 56.8 MMBOE (156 MBOE per day) at an average
realized price of $71.83 per BOE for 2014, reflecting the June 2014 sale
of the Eagle Ford shale assets, partly offset by higher volumes in the
GOM. FCX expects oil and gas sales volumes to approximate
57.6 MMBOE (158 MBOE per day) for 2016.

OIL AND GAS SALES PROVED AND PROBABLE OIL AND PROVED, PROBABLE AND POSSIBLE
in MMBOE GAS RESERVES BY REGION OIL AND GAS RESERVES
381 MMBOE 539 MMBOE
60

45

30

15

2015 2016e

G ulf of Mexico
64%  47% Proved
California
31%  24% Probable
Haynesville/Other
5%  29% Possible

12 F reeport -M c M o R an

MINING RESERVES AND
MINERALIZED MATERIAL
FCX has significant reserves, resources and future development
opportunities within its portfolio of mining assets. Estimated
consolidated recoverable proven and probable mineral reserves at
December 31, 2015, included 99.5 billion pounds of copper,
27.1 million ounces of gold, 3.05 billion pounds of molybdenum,
271.2 million ounces of silver and 0.9 billion pounds of cobalt.
These estimates were determined using long-term average prices
of $2.00 per pound for copper, $1,000 per ounce for gold, $10 per
pound for molybdenum, $15 per ounce for silver and $10 per pound
for cobalt.
FCX’s operating mines and other properties also contain mineralized
material that it believes could be brought into production should
market conditions warrant. At December 31, 2015, FCX identified
estimated mineralized material totaling 105 billion pounds of
incremental contained copper (assessed using a long-term average
copper price of $2.20 per pound).
CONSOLIDATED
COPPER RESERVES
99.5 billion lbs
34% North America
31% South America
28% Indonesia
7% Africa
RESERVES
Photo: FM O&G’s Holstein platform in
the Deepwater Gulf of Mexico
OIL AND GAS RESERVES
FCX’s oil and gas business has significant proved, probable and
possible reserves, with valuable infrastructure and associated
resources with attractive long-term production and development
potential. All of FCX’s oil and natural gas reserves are located in
the United States (U.S.).
Estimated proved oil and natural gas reserve volumes are
determined in accordance with guidelines established by the
U.S. Securities and Exchange Commission, which generally
require the use of an average price, calculated as the twelve-month
average of the first-day-of-the-month historical reference prices,
as adjusted for location and quality differentials. At December 31,
2015, FCX’s estimated proved oil and natural gas reserves were
based on reference prices of $50.28 per barrel and $2.59 per million
British thermal units (MMBtu) and totaled 252 MMBOE,
including 207 MMBbls of oil and natural gas liquids (NGLs)
and 274 Bcf of natural gas.
In addition, at December 31, 2015, estimated probable reserves,
which are additional reserves that are less certain to be recovered
than proved reserves, totaled 129 MMBOE, including 117 MMBbls
of oil and NGLs and 76 Bcf of natural gas.
FCX’s long-lived,
geographically diverse
portfolio includes
significant mining
reserves, resources
and future development
opportunities.
2015 ANNUAL REPORT 13
 FINANCIAL
PERFORMANCE

FINANCIAL PERFORMANCE
Operating Cash Flow and Cash Position
During 2015, FCX generated operating cash flows of $3.2 billion.
At December 31, 2015, FCX had consolidated cash of $224 million
and total debt of $20.4 billion. At December 31, 2015, FCX had no
borrowings and availability of $4.0 billion under its credit facility.
underground development activities at Grasberg) and $3.0 billion for
oil and gas operations.
Capital expenditures are expected to approximate $3.4 billion for
the year 2016, including $1.4 billion for major projects at mining
operations and $1.5 billion for oil and gas operations.
Financing Transactions

Based on current sales volume and costs estimates, and assuming Net proceeds from debt in 2015 primarily included borrowings of
average prices of $2.00 per pound of copper, $1,100 per ounce of gold, $1.4 billion under Cerro Verde’s senior unsecured credit facility to
$4.50 per pound of molybdenum and $34 per barrel of Brent crude fund its expansion project.
oil, FCX estimates consolidated operating cash flows for the year During 2015, FCX sold 206 million shares of common stock,
2016 would approximate $3.4 billion (net of $0.6 billion of idle generating gross proceeds of $1.96 billion under at-the-market equity
rig costs). programs. Net proceeds from the at-the-market equity programs
Investing Activities were used for general corporate purposes, including the repayment
of amounts outstanding under the revolving credit facility and
FCX’s capital expenditures totaled $6.35 billion in 2015, including
other borrowings, and the financing of working capital and capital
$2.4 billion for major projects at mining operations (primarily
expenditures.
associated with the expansion project at Cerro Verde and the
FCX is focused on cost and capital management and cash flow
generation from its operations under the current weak commodity
price environment and is taking actions to accelerate its debt
reduction plans and enhance shareholder value through pursuing asset
FCX’s immediate objective sales and joint venture transactions.
is to restore its balance
sheet strength and enhance
shareholder value.
Photo: Remote-controlled
loader operations at
the Deep Ore Zone
underground mine in the
Grasberg minerals district

14 F reeport -M c M o R an
 SUSTAINABLE
DEVELOPMENT

In every community where

FCX operates, the company
Photo: Agronomists at the Tenke Fungurume mine in the DRC
provide sustainable agriculture training to local farmers,
improving crop yields and food security in the region
works in partnership to build
sustainable futures.

2015 COMMUNITY INVESTMENT

$165 million
SUSTAINABLE DEVELOPMENT

The metals FCX produces are essential to the world’s economies.

Work with stakeholders on the critical areas of safety and
environmental, economic and social responsibility are at the core of
FCX’s approach to sustainable development. In addition to operating
a business that upholds and respects human rights, FCX engages
openly and transparently while aiming to maximize the benefits
that its operations deliver. FCX’s community investment strategy
is focused on addressing high-priority needs and facilitating local
19% Community Trust Funds capacity building to sustain communities post-closure (see the 2015
Economic Development and
17%  Community Investment summary at left). The work of dedicated FCX
Infrastructure
employees on multi-stakeholder initiatives is important in advancing
Safety, Health and Environment
15% 
effective partnerships to provide a meaningful contribution to
Education and Training
14%  sustainable development around the globe.
Administration
12% 
Learn about FCX’s sustainable development programs and
O ther*
23% 
performance in its annual Working Toward Sustainable Development
report, which is prepared in accordance with the Global Reporting

* I ncludes arts, culture, heritage, resettlement and employee

Initiative and is available at fcx.com/sd.
programs such as matching gifts and United Way.

2015 ANNUAL REPORT 15

 BOARD OF DIRECTORS
AND MANAGEMENT
BOARD OF DIRECTORS
Gerald J. Ford (1, 3, 5)
Non-Executive Chairman of the Board
Freeport-McMoRan Inc.
Chairman of the Board
Hilltop Holdings, Inc.
Richard C. Adkerson
Vice Chairman of the Board,
President and Chief Executive Officer
Freeport-McMoRan Inc.
Robert A. Day (1, 3, 5)
Founder and Former Chairman
Trust Company of the West
Lydia H. Kennard (3,4)
President and Chief Executive Officer
KDG Construction Consulting
Andrew Langham (2,3)
General Counsel
Icahn Enterprises L.P.
EXECUTIVE OFFICERS
Richard C. Adkerson
Vice Chairman of the Board,
President and Chief Executive Officer
Kathleen L. Quirk
Executive Vice President,
Chief Financial Officer and Treasurer
Harry M. “Red” Conger
President and Chief Operating Officer –
Americas and Africa Mining
Michael J. Arnold
Executive Vice President and
Chief Administrative Officer
16 F reeport -M c M o R an
Jon C. Madonna (1,2,3) CHAIRMAN EMERITUS
Retired Chairman and
Chief Executive Officer James R. Moffett
KPMG LLP Former Chairman of the Board
Freeport-McMoRan Inc.
Courtney Mather (1,5)
Managing Director
DIRECTOR EMERITUS
Icahn Capital LP
Dr. Henry A. Kissinger
Dustan E. McCoy (2,4,5)
Chairman
Retired Chairman and
Kissinger Associates, Inc.
Chief Executive Officer
Brunswick Corporation
Frances Fragos Townsend (2,4,5) BOARD COMMITTEES:
Executive Vice President of
1) Audit Committee
Worldwide Government, Legal and
2) Compensation Committee
Business Affairs 3) Nominating and Corporate Governance Committee
MacAndrews & Forbes Holdings Inc. 4) Corporate Responsibility Committee
5) Executive Committee
OPERATIONS FINANCE AND
ADMINISTRATION
Richard E. Coleman
President – Freeport-McMoRan W. Russell King
Mining Company Senior Vice President –
International Relations and
William E. Harris
Federal Government Affairs
President – Freeport-McMoRan Africa
L. Richards McMillan, II
Stephen T. Higgins
Senior Vice President and
President – Freeport-McMoRan
General Counsel
Sales Company Inc.
Vice President – FCX (Cathode and Rod) C. Donald Whitmire, Jr.
Vice President and
Mark J. Johnson
Controller – Financial Reporting
President – Freeport-McMoRan Indonesia
Internal Auditors
Michael J. Kendrick
Deloitte & Touche LLP
President – Climax Molybdenum Co.
Mark D. Kidder
Executive Vice President – Operations
Freeport-McMoRan Oil & Gas LLC
Javier Targhetta
President – Atlantic Copper, S.L.U.
Senior Vice President – FCX (Concentrates)
 O U R
I NG
PROV

ation
t i n g I n fo r m
Ope ra
a l a n d
Fi nanci

OF
TABLE TE NTS
CON
18 Selected Financial and Operating Data

22 Management’s Discussion and Analysis

73 Management’s Report on Internal

Control Over Financial Reporting

74 Report of Independent Registered

Public Accounting Firm

75 Report of Independent Registered

Public Accounting Firm

76 Consolidated Statements of Operations

77 Consolidated Statements of
Comprehensive (Loss) Income

78 Consolidated Statements of Cash Flows

79 Consolidated Balance Sheets

80 Consolidated Statements of Equity

81 Notes to Consolidated Financial

Statements

2015 ANNUAL REPORT 17

 SELECTED FINANCIAL AND
OPERATING DATA

Years Ended December 31, 2015 2014 2013a 2012 2011

(In millions, except per share amounts)

CONSOLIDATED FINANCIAL DATA

Revenues $ 15,877b $ 21,438b $ 20,921b $ 18,010 $ 20,880
Operating (loss) income $ (13,382)b,c,d $ 97b,c,e $ 5,351b,c,f $ 5,814c,g $ 9,140c,h
Net (loss) income $ (12,089) $ (745) $ 3,441 $ 3,980 $ 5,747
Net (loss) income attributable to common stockholders $ (12,236)b,c,d,i $ (1,308)b,c,e,j,k $ 2,658b,c,f,j,k,l $ 3,041c,g,j,k $ 4,560c,h,j,k

Basic net (loss) income per share attributable to common stockholders $ (11.31) $ (1.26) $ 2.65 $ 3.20 $ 4.81
Basic weighted-average common shares outstanding 1,082 1,039 1,002 949 947
Diluted net (loss) income per share attributable to common stockholders $ (11.31)b,c,d,i $ (1.26)b,c,e,j,k $ 2.64b,c,f,j,k,l $ 3.19c,g,j,k $ 4.78c,h,j,k
Diluted weighted-average common shares outstanding 1,082 1,039 1,006 954 955

Dividends declared per share of common stock $ 0.2605 $ 1.25 $ 2.25 $ 1.25 $ 1.50
Operating cash flows $ 3,220 $ 5,631 $ 6,139 $ 3,774 $ 6,620
Capital expenditures $ 6,353 $ 7,215 $ 5,286 $ 3,494 $ 2,534

At December 31:
Cash and cash equivalents $ 224 $ 464 $ 1,985 $ 3,705 $ 4,822
Property, plant, equipment and mining development costs, net $ 27,509 $ 26,220 $ 24,042 $ 20,999 $ 18,449
Oil and gas properties, net $ 7,093 $ 19,274 $ 23,359 $ — $ —
Goodwill $ — $ — $ 1,916 $ — $ —
Total assets $ 46,577 $ 58,674m $ 63,385m $ 35,421m $ 32,038m
Total debt, including current portion $ 20,428 $ 18,849m $ 20,618m $ 3,508m $ 3,505m
Redeemable noncontrolling interest $ 764 $ 751 $ 716 $ — $ —
Total stockholders’ equity $ 7,828 $ 18,287 $ 20,934 $ 17,543 $ 15,642

The selected consolidated financial data shown above is derived from our audited consolidated financial statements. These historical results are not necessarily
indicative of results that you can expect for any future period. You should read this data in conjunction with Management’s Discussion and Analysis of Financial Condition
and Results of Operations and Quantitative and Qualitative Disclosures about Market Risks (MD&A) and our Consolidated Financial Statements and Notes thereto
contained in this annual report. All references to income or losses per share are on a diluted basis, unless otherwise noted.
a. Includes the results of FCX Oil & Gas Inc. (FM O&G) beginning June 1, 2013.
b. Includes net noncash mark-to-market (losses) gains associated with crude oil and natural gas derivative contracts totaling $(319) million ($(198) million to net loss attributable to common stockholders
or $(0.18) per share) for 2015, $627 million ($389 million to net loss attributable to common stockholders or $0.37 per share) for 2014 and $(312) million ($(194) million to net income attributable to common
stockholders or $(0.19) per share) for the seven-month period from June 1, 2013, to December 31, 2013.
c. Includes net charges (credits) for adjustments to environmental obligations and related litigation reserves of $43 million ($28 million to net loss attributable to common stockholders or $0.03 per share)
in 2015, $76 million ($50 million to net loss attributable to common stockholders or $0.05 per share) in 2014, $19 million ($17 million to net income attributable to common stockholders or $0.02 per share)
in 2013, $(62) million ($(40) million to net income attributable to common stockholders or $(0.04) per share) in 2012 and $107 million ($86 million to net income attributable to common stockholders or
$0.09 per share) in 2011.
d. The year 2015 includes net charges totaling $13.8 billion to operating loss ($12.0 billion to net loss attributable to common stockholders or $11.11 per share) consisting of (i) $13.1 billion ($11.6 billion
to net loss attributable to common stockholders) for impairment of oil and gas properties, (ii) $338 million ($217 million to net loss attributable to common stockholders) for adjustments to copper
and molybdenum inventories, (iii) $188 million ($117 million to net loss attributable to common stockholders) for charges at oil and gas operations primarily associated with other asset impairments
and inventory write-downs, idle/terminated rig costs and prior year non-income tax assessments related to the California properties, (iv) $156 million ($94 million to net loss attributable to common
stockholders) for charges at mining operations primarily associated with asset impairment, restructuring and other net charges and (v) $18 million ($12 million to net loss attributable to common
stockholders) for executive retirement benefits, partly offset by (vi) a net gain of $39 million ($25 million to net loss attributable to common stockholders) for the sale of the Luna Energy power facility.
e. The year 2014 includes net charges totaling $4.8 billion to operating income ($3.6 billion to net loss attributable to common stockholders or $3.46 per share) consisting of (i) $3.7 billion ($2.3 billion to
net loss attributable to common stockholders) for impairment of oil and gas properties, (ii) $1.7 billion ($1.7 billion to net loss attributable to common stockholders) to impair the full carrying value of
goodwill, (ii) $46 million ($29 million to net loss attributable to common stockholders) for charges at oil and gas operations primarily associated with idle/terminated rig costs and inventory write-downs
and (iv) $6 million ($4 million to net loss attributable to common stockholders) for adjustments to molybdenum inventories, partly offset by (v) net gains on sales of assets of $717 million ($481 million
to net loss attributable to common stockholders) primarily from the sale of our 80 percent interests in the Candelaria and Ojos del Salado mining operations.
f. The year 2013 includes net charges totaling $232 million to operating income ($137 million to net income attributable to common stockholders or $0.14 per share) consisting of (i) $80 million ($50 million
to net income attributable to common stockholders) for transaction and related costs principally associated with our oil and gas acquisitions, (ii) $76 million ($49 million to net income attributable
to common stockholders) associated with updated mine plans at Morenci that resulted in a loss in recoverable leach stockpiles, (iii) $37 million ($23 million to net income attributable to common
stockholders) for restructuring an executive employment arrangement, (iv) $36 million ($13 million to net income attributable to common stockholders) associated with a labor agreement at
Cerro Verde and (v) $3 million ($2 million to net income attributable to common stockholders) for adjustments to molybdenum inventories.
g. The year 2012 includes net charges totaling $16 million to operating income ($8 million to net income attributable to common stockholders or $0.01 per share) associated with a labor agreement at Candelaria.
h. The year 2011 includes net charges totaling $57 million to operating income ($19 million to net income attributable to common stockholders or $0.02 per share) consisting of (i) $116 million ($50 million
to net income attributable to common stockholders) associated with labor agreements at PT Freeport Indonesia (PT-FI), Cerro Verde and El Abra, partly offset by (ii) a gain of $59 million ($31 million
to net income attributable to common stockholders) for the settlement of an insurance claim for business interruption and property damage related to PT-FI’s concentrate pipelines.
i. The year 2015 includes a gain of $92 million ($92 million to net loss attributable to common stockholders or $0.09 per share) related to net proceeds received from insurance carriers and other third
parties related to the shareholder derivative litigation settlement.
j. Includes after-tax net gains (losses) on early extinguishment of debt totaling $3 million (less than $0.01 per share) in 2014, $(28) million ($(0.03) per share) in 2013, $(149) million ($(0.16) per share) in 2012
and $(60) million ($(0.06) per share) in 2011.
k. As further discussed in “Consolidated Results — Provision for Income Taxes” contained in MD&A, amounts include net tax charges of $121 million ($103 million net of noncontrolling interests or
$0.10 per share) in 2014 and a net tax benefit of $199 million ($0.20 per share) in 2013. In addition, the year 2012 includes a net tax benefit of $205 million ($98 million net of noncontrolling interests
or $0.11 per share) primarily for adjustments to Cerro Verde’s deferred income taxes, and the year 2011 includes a tax charge of $53 million ($49 million net of noncontrolling interests or $0.05 per share)
for additional taxes associated with Cerro Verde’s election to pay a special mining burden.
l. The year 2013 includes a gain of $128 million ($0.13 per share) related to our preferred stock investments in and the subsequent acquisition of McMoRan Exploration Co.
m. Amounts restated to reflect adoption of new accounting guidance for debt issuance costs, which reduced total debt and total assets by $121 million at December 31, 2014, $88 million at
December 31, 2013, $19 million at December 31, 2012, and $32 million at December 31, 2011.

18
 SELECTED FINANCIAL AND
OPERATING DATA

Years Ended December 31, 2015 2014 2013 2012 2011

CONSOLIDATED MINING OPERATING DATA

Copper
Production (millions of recoverable pounds) 4,017 3,904 4,131 3,663 3,691
Production (thousands of recoverable metric tons) 1,822 1,771 1,874 1,662 1,674
Sales, excluding purchases (millions of recoverable pounds) 4,070 3,888 4,086 3,648 3,698
Sales, excluding purchases (thousands of recoverable metric tons) 1,846 1,764 1,853 1,655 1,678
Average realized price per pound $ 2.42 $ 3.09 $ 3.30 $ 3.60 $ 3.86
Gold
Production (thousands of recoverable ounces) 1,257 1,214 1,250 958 1,383
Sales, excluding purchases (thousands of recoverable ounces) 1,247 1,248 1,204 1,010 1,378
Average realized price per ounce $ 1,129 $ 1,231 $ 1,315 $ 1,665 $ 1,583
Molybdenum
Production (millions of recoverable pounds) 92 95 94 85 83
Sales, excluding purchases (millions of recoverable pounds) 89 95 93 83 79
Average realized price per pound $ 8.70 $ 12.74 $ 11.85 $ 14.26 $ 16.98
NORTH AMERICA COPPER MINES
Operating Data, Net of Joint Venture Interest
Copper
Production (millions of recoverable pounds) 1,947 1,670 1,431 1,363 1,258
Production (thousands of recoverable metric tons) 883 757 649 618 571
Sales, excluding purchases (millions of recoverable pounds) 1,988 1,664 1,422 1,351 1,247
Sales, excluding purchases (thousands of recoverable metric tons) 902 755 645 613 566
Average realized price per pound $ 2.47 $ 3.13 $ 3.36 $ 3.64 $ 3.99
Molybdenum
Production (millions of recoverable pounds) 37 33 32 36 35
100% Operating Data
Solution extraction/electrowinning (SX/EW) operations
Leach ore placed in stockpiles (metric tons per day) 909,900 1,005,300 1,003,500 998,600 888,300
Average copper ore grade (percent) 0.26 0.25 0.22 0.22 0.24
Copper production (millions of recoverable pounds) 1,134 963 889 866 801
Mill operations
Ore milled (metric tons per day) 312,100 273,800 246,500 239,600 222,800
Average ore grade (percent):
Copper 0.49 0.45 0.39 0.37 0.38
Molybdenum 0.03 0.03 0.03 0.03 0.03
Copper recovery rate (percent) 85.4 85.8 85.3 83.9 83.1
Copper production (millions of recoverable pounds) 972 828 642 592 549
SOUTH AMERICA MININGa
Copper
Production (millions of recoverable pounds) 869 1,151 1,323 1,257 1,306
Production (thousands of recoverable metric tons) 394 522 600 570 592
Sales (millions of recoverable pounds) 871 1,135 1,325 1,245 1,322
Sales (thousands of recoverable metric tons) 395 515 601 565 600
Average realized price per pound $ 2.38 $ 3.08 $ 3.30 $ 3.58 $ 3.77
Gold
Production (thousands of recoverable ounces) — 72 101 83 101
Sales (thousands of recoverable ounces) — 67 102 82 101
Average realized price per ounce — $ 1,271 $ 1,350 $ 1,673 $ 1,580
Molybdenum
Production (millions of recoverable pounds) 7 11 13 8 10
SX/EW operations
Leach ore placed in stockpiles (metric tons per day) 193,900 275,200 274,600 229,300 245,200
Average copper ore grade (percent) 0.44 0.48 0.50 0.55 0.50
Copper production (millions of recoverable pounds) 430 491 448 457 439

19
 SELECTED FINANCIAL AND
OPERATING DATA

Years Ended December 31, 2015 2014 2013 2012 2011

SOUTH AMERICA MININGa (continued)

Mill operations
Ore milled (metric tons per day) 152,100 180,500 192,600 191,400 189,200
Average ore grade:
Copper (percent) 0.46 0.54 0.65 0.60 0.66
Gold (grams per metric ton) — 0.10 0.12 0.10 0.12
Molybdenum (percent) 0.02 0.02 0.02 0.02 0.02
Copper recovery rate (percent) 81.5 88.1 90.9 90.1 89.6
Copper production (millions of recoverable pounds) 439 660 875 800 867
INDONESIA MINING
Operating Data, Net of Joint Venture Interest
Copper
Production (millions of recoverable pounds) 752 636 915 695 846
Production (thousands of recoverable metric tons) 341 288 415 315 384
Sales (millions of recoverable pounds) 744 664 885 716 846
Sales (thousands of recoverable metric tons) 337 301 401 325 384
Average realized price per pound $ 2.33 $ 3.01 $ 3.28 $ 3.58 $ 3.85
Gold
Production (thousands of recoverable ounces) 1,232 1,130 1,142 862 1,272
Sales (thousands of recoverable ounces) 1,224 1,168 1,096 915 1,270
Average realized price per ounce $ 1,129 $ 1,229 $ 1,312 $ 1,664 $ 1,583
100% Operating Data
Ore milled (metric tons per day):b
Grasberg open pit 115,900 69,100 127,700 118,800 112,900
Deep Ore Zone underground mine 43,700 50,500 49,400 44,600 51,700
Deep Mill Level Zone underground mine 2,900 — — — —
Big Gossan underground mine — 900 2,100 1,600 1,500
Total 162,500 120,500 179,200 165,000 166,100
Average ore grade:
Copper (percent) 0.67 0.79 0.76 0.62 0.79
Gold (grams per metric ton) 0.79 0.99 0.69 0.59 0.93
Recovery rates (percent):
Copper 90.4 90.3 90.0 88.7 88.3
Gold 83.4 83.2 80.0 75.7 81.2
Production:
Copper (millions of recoverable pounds) 752 651 928 695 882
Gold (thousands of recoverable ounces) 1,232 1,132 1,142 862 1,444
AFRICA MINING
Copper
Production (millions of recoverable pounds) 449 447 462 348 281
Production (thousands of recoverable metric tons) 204 203 210 158 127
Sales (millions of recoverable pounds) 467 425 454 336 283
Sales (thousands of recoverable metric tons) 212 193 206 152 128
Average realized price per pound $ 2.42 $ 3.06 $ 3.21 $ 3.51 $ 3.74
Cobalt
Production (millions of contained pounds) 35 29 28 26 25
Sales (millions of contained pounds) 35 30 25 25 25
Average realized price per pound $ 8.21 $ 9.66 $ 8.02 $ 7.83 $ 9.99
Ore milled (metric tons per day) 14,900 14,700 14,900 13,000 11,100
Average ore grade (percent):
Copper 4.00 4.06 4.22 3.62 3.41
Cobalt 0.43 0.34 0.37 0.37 0.40
Copper recovery rate (percent) 94.0 92.6 91.4 92.4 92.5

20
 SELECTED FINANCIAL AND
OPERATING DATA

Years Ended December 31, 2015 2014 2013 2012 2011

MOLYBDENUM MINES
Molybdenum production (millions of recoverable pounds) 48 51 49 41c 38
Ore milled (metric tons per day) 34,800 39,400 35,700 20,800d 22,300d
Average molybdenum ore grade (percent) 0.20 0.19 0.19 0.23d 0.24d
OIL AND GAS OPERATIONSe
Sales volumes:
Oil (million barrels) 35.3 40.1 26.6 — —
Natural gas (billion cubic feet) 89.7 80.8 54.2 — —
Natural gas liquids (NGLs) (million barrels) 2.4 3.2 2.4 — —
Million barrels of oil equivalents 52.6 56.8 38.1 — —
Average realizations:
Oil (per barrel) $ 57.11 $ 90.00 $ 98.32 — —
Natural gas (per million British thermal units) $ 2.59 $ 4.23 $ 3.99 — —
NGLs (per barrel) $ 18.90 $ 39.73 $ 38.20 — —
a. Includes the results of the Candelaria and Ojos del Salado mines prior to their sale in November 2014.
b. Represents the approximate average daily throughput processed at PT-FI’s mill facilities from each producing mine.
c. Includes production from the Climax molybdenum mine, which began commercial operations in May 2012.
d. The years 2012 and 2011 reflect operating data of only the Henderson mine.
e. Represents the results of FM O&G beginning June 1, 2013.

21
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
In Management’s Discussion and Analysis of Financial Condition
and Results of Operations and Quantitative and Qualitative
Disclosures About Market Risk, "we,” “us” and “our” refer to
Freeport-McMoRan Inc. (FCX) and its consolidated subsidiaries.
The results of operations reported and summarized below
are not necessarily indicative of future operating results (refer
to “Cautionary Statement” for further discussion). References to
“Notes” are Notes included in our Notes to Consolidated
Financial Statements. Throughout Management’s Discussion and
Analysis of Financial Condition and Results of Operations and
Quantitative and Qualitative Disclosures About Market Risk, all
references to income or losses per share are on a diluted basis,
unless otherwise noted.
OVERVIEW
We are a premier United States (U.S.)-based natural resources
company with an industry-leading global portfolio of mineral
assets and significant oil and natural gas resources. We are the
world’s largest publicly traded copper producer. Our portfolio
of assets includes the Grasberg minerals district in Indonesia,
one of the world’s largest copper and gold deposits; significant
mining operations in North and South America; the Tenke
Fungurume (Tenke) minerals district in the Democratic Republic
of Congo (DRC) in Africa; and significant U.S. oil and natural
gas assets, including reserves in the Deepwater Gulf of Mexico
(GOM), onshore and offshore California and in the Haynesville
shale in Louisiana, and a position in the Inboard Lower Tertiary/
Cretaceous natural gas trend onshore in South Louisiana.
Our results for 2015, compared with 2014, were significantly
affected by lower price realizations from copper and oil. Results
for both years were also impacted by impairment charges
associated with oil and gas properties totaling $13.1 billion
($11.6 billion to net loss attributable to common stockholders) in
2015 and $5.5 billion ($4.0 billion to net loss attributable to
common stockholders) in 2014 (refer to “Critical Accounting
Estimates” and Note 2 for further discussion of these impairment
charges). Refer to “Consolidated Results” for discussion of items
impacting our consolidated results for the three years ended
December 31, 2015.
We have significant mineral reserves, resources and future
development opportunities within our portfolio of mining assets.
At December 31, 2015, our estimated consolidated recoverable
proven and probable mineral reserves totaled 99.5 billion pounds
of copper, 27.1 million ounces of gold and 3.05 billion pounds of
molybdenum, which were determined using long-term average
prices of $2.00 per pound for copper, $1,000 per ounce for gold
and $10 per pound for molybdenum. Refer to “Critical Accounting
Estimates — Mineral Reserves” for further discussion.
22
A summary of the sources of our consolidated copper, gold
and molybdenum production for the year 2015 by geographic
location follows:
Copper Gold Molybdenum
North America 48% 2% 92% a
South America 22 — 8
Indonesia 19 98 —
Africa 11 — —
100% 100% 100%
a. Our Henderson and Climax molybdenum mines produced 52 percent of consolidated
molybdenum production, and our North America copper mines produced 40 percent.
Copper production from the Grasberg mine in Indonesia, Morenci
mine in North America and Cerro Verde mine in South America
together totaled 55 percent of our consolidated copper production
in 2015.
Our oil and gas business has significant proved, probable and
possible reserves with organic growth opportunities. Our
estimated proved oil and natural gas reserves at December 31,
2015, totaled 252 million barrels of oil equivalents (MMBOE), with
82 percent comprised of oil and natural gas liquids (NGLs). For
2015, our oil and gas sales volumes totaled 52.6 MMBOE,
including 35.3 million barrels (MMBbls) of crude oil, 89.7 billion
cubic feet (Bcf) of natural gas and 2.4 MMBbls of NGLs. Refer to
“Operations” for further discussion of our oil and gas operations
and to “Critical Accounting Estimates — Oil and Natural Gas
Reserves” for further discussion of our reserves.
Our Board of Directors (Board) is undertaking a strategic review
of alternatives for our oil and gas business (FCX Oil & Gas Inc., or
FM O&G). We and our advisors are actively engaged with interested
participants in a process to evaluate opportunities that include
asset sales and joint venture arrangements that would generate
cash proceeds for debt repayment. We expect to advance the
evaluation of these alternatives during the first half of 2016.
At December 31, 2015, we had $20.4 billion in total debt. We
have announced initiatives to accelerate our debt reduction plans.
Several initiatives are currently being advanced, including an
evaluation of alternatives for the oil and gas business as well as
several potential transactions involving certain of our mining assets.
In February 2016, we entered into a definitive agreement to
sell a 13 percent undivided interest in the Morenci unincorporated
joint venture to Sumitomo Metal Mining Co., Ltd. for $1.0 billion
in cash and also reached agreement with our Bank group to
amend our revolving credit facility and term loan. Refer to Note 18
for further discussion.

REVISED OPERATING PLANS
During 2015, in response to weak market conditions, we took
actions to enhance our financial position, including significant
reductions in capital spending, production curtailments at certain
North and South America mines (which resulted in aggregate
annual reductions of 350 million pounds of copper and 34 million
pounds of molybdenum) and actions to reduce operating,
exploration and administrative costs (refer to “Operations” for
further discussion). In addition, we generated approximately
$2 billion in gross proceeds from at-the-market equity programs,
and our Board reduced our annual common stock dividend from
$1.25 per share to $0.20 per share in March 2015, and
subsequently suspended the annual common stock dividend in
December 2015 (refer to Note 10 and “Capital Resources and
Liquidity” for further discussion).
Concerns about the global economy, and particularly the
weakening of the Chinese economy, have dominated financial
market sentiment and negatively impacted commodity prices,
including copper. Oil prices have weakened to multi-year lows in
response to excess global supplies and relatively weak economic
conditions. Current market conditions and uncertainty about
the timing of economic and commodity price recovery require us
to continue taking actions to strengthen our financial position,
reduce debt and re-focus our portfolio of assets. Our business
strategy is focused on our position as a leading global copper
producer. We will continue to manage our production activities,
spending on capital projects and operations, and the administration
of our business to enhance cash flows, and intend to complete
significant asset sale transactions to reduce debt. We are
confident about the longer term outlook for copper prices based
on the global demand and supply fundamentals. With our
established reserves and large-scale current production base,
our significant portfolio of undeveloped resources, and our
global organization of highly qualified and dedicated workers
and management, we believe we are well positioned to generate
significant asset sale proceeds while retaining an attractive
portfolio of high-quality assets.
OUTLOOK
We view the long-term outlook for our business positively,
supported by limitations on supplies of copper and by the
requirements for copper and oil in the world’s economy. Our
financial results vary as a result of fluctuations in market prices
primarily for copper, gold, molybdenum and oil, as well as other
factors. World market prices for these commodities have
fluctuated historically and are affected by numerous factors
beyond our control. Because we cannot control the price of our
products, the key measures that management focuses on in
operating our business are sales volumes, unit net cash costs for
our mining operations, cash production costs per barrel of oil
equivalents (BOE) for our oil and gas operations, operating cash
flow and capital expenditures.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
Projections included in this annual report for the year ended
December 31, 2015, do not reflect PT Freeport Indonesia (PT-FI)
continuing to pay a 5.0 percent export duty on concentrate or the
results of any potential transactions with third parties to raise
cash for debt reduction, including the recently announced
transaction to sell a 13 percent undivided interest in Morenci
(refer to Note 18). Additionally, projections for the year 2016
assume renewal of PT-FI’s export permit after August 8, 2016.
Sales Volumes. Following are our projected consolidated sales
volumes for 2016 and actual consolidated sales volumes for 2015:
2016 2015
(Projected) (Actual)
Copper (millions of recoverable pounds):
North America copper mines 1,820 1,988
South America mining 1,340 871
Indonesia mining 1,475 744
Africa mining 495 467
5,130 4,070
Gold (thousands of recoverable ounces) 1,835 1,247
Molybdenum (millions of recoverable pounds) 73 a 89
Oil Equivalents (MMBOE) 57.6 52.6
a. Projected molybdenum sales include 30 million pounds produced by our molybdenum
mines and 43 million pounds produced by our North and South America copper mines.
Consolidated sales for first-quarter 2016 are expected to
approximate 1.1 billion pounds of copper, 200 thousand ounces of
gold, 19 million pounds of molybdenum and 12.4 MMBOE.
Anticipated higher grades from Grasberg in the second half of
2016 are expected to result in approximately 55 percent of
consolidated copper sales and 75 percent of consolidated gold
sales occurring in the second half of the year. Projected sales
volumes are dependent on operational performance and other
factors. For other important factors that could cause results to
differ materially from projections, refer to “Cautionary Statement.”
Mining Unit Net Cash Costs. Unit net cash costs for 2016 are
expected to decline significantly from 2015, principally reflecting
higher anticipated copper and gold volumes, the impact of lower
energy and other input costs and cost reduction initiatives.
Assuming average prices of $1,100 per ounce of gold and $4.50
per pound of molybdenum, and achievement of current volume
and cost estimates, consolidated unit net cash costs (net of
by-product credits) for our copper mines are expected to average
$1.10 per pound in 2016, compared with $1.53 per pound in 2015.
The impact of price changes in 2016 on consolidated unit net cash
costs would approximate $0.015 per pound for each $50 per
ounce change in the average price of gold and $0.015 per pound
for each $2 per pound change in the average price of
molybdenum. Quarterly unit net cash costs vary with fluctuations
in volumes and average realized prices (primarily gold and
molybdenum prices). Higher anticipated grades from Grasberg in
2015 ANNUAL REPORT 23
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

the second half of 2016 are expected to result in lower unit net a low of $525 per ounce in 2006 to a record high of $1,895 per
cash costs in the second half of 2016, compared to the first half ounce in 2011, and the Metals Week Molybdenum Dealer
of the year. Refer to “Consolidated Results — Production and Oxide weekly average price ranged from a low of $4.46 per pound
Delivery Costs” for further discussion of consolidated production in 2015 to a high of $33.88 per pound in 2008. Copper, gold and
costs for our mining operations. molybdenum prices are affected by numerous factors beyond our
Oil and Gas Cash Production Costs per BOE. Cash production control as described further in our “Risk Factors” contained
costs per BOE for 2016 are expected to decline from 2015 per BOE in Part I, Item 1A. of our annual report on Form 10-K for the year
costs, principally reflecting increased production from the ended December 31, 2015.
Deepwater GOM and cost reduction efforts. Based on current sales
volume and cost estimates, oil and gas cash production costs LME Copper Prices
Through January 31, 2016
are expected to approximate $15 per BOE in 2016, compared with
$18.59 per BOE in 2015. Refer to “Operations — Oil and Gas 1,500 $5.00
Operations” for further discussion of oil and gas production costs. $4.50
Consolidated Operating Cash Flow. Our consolidated operating 1,200 $4.00

000s of metric tons

cash flows vary with volumes, prices realized from copper, gold, $3.50

Dollars per pound

molybdenum and oil sales, production costs, income taxes, 900 $3.00

other working capital changes and other factors. Based on current $2.50
600 $2.00
sales volume and cost estimates, and assuming average prices
$1.50
of $2.00 per pound of copper, $1,100 per ounce of gold, $4.50 per
300 $1.00
pound of molybdenum and $34 per barrel of Brent crude oil, we
$0.50
estimate consolidated operating cash flows for 2016 of $3.4 billion
2006 2008 2010 2012 2014 2016
(net of $0.6 billion in idle rig costs). Projected consolidated
operating cash flows for 2016 also reflect an estimated income LME Copper Prices
Exchange Stocks
tax provision of $0.8 billion primarily associated with income from
our international mining operations (refer to “Consolidated
This graph presents LME spot copper prices and combined
Results — Income Taxes” for further discussion of projected income
reported stocks of copper at the LME, Commodity Exchange Inc.
taxes). The impact of price changes in 2016 on consolidated
(COMEX), a division of the New York Mercantile Exchange
operating cash flows would approximate $440 million for each
(NYMEX), and the Shanghai Futures Exchange from January 2006
$0.10 per pound change in the average price of copper, $55 million
through January 2016. Since mid-2014, copper prices have
for each $50 per ounce change in the average price of gold,
declined because of concerns about slowing growth rates in China,
$60 million for each $2 per pound change in the average price of
a stronger U.S. dollar and a broad-based decline in commodity
molybdenum and $135 million for each $5 per barrel change
prices. During 2015, LME spot copper prices ranged from a low of
in the average Brent crude oil price.
$2.05 per pound to a high of $2.92 per pound, averaged $2.49
Consolidated Capital Expenditures. Consolidated capital
per pound and closed at $2.13 per pound on December 31, 2015.
expenditures are expected to approximate $3.4 billion for 2016,
The LME spot copper price closed at $2.08 per pound on
including $1.9 billion from the mining business (reflecting
February 19, 2016.
$1.4 billion for major projects primarily for underground
We believe the underlying long-term fundamentals of the
development activities at Grasberg and remaining costs for the
copper business remain positive, supported by the significant role
Cerro Verde expansion and $0.5 billion for sustaining capital)
of copper in the global economy and a challenging long-term
and $1.5 billion for oil and gas operations. Consolidated capital
supply environment attributable to difficulty in replacing existing
expenditures exclude $0.6 billion for idle rig costs associated
large mines’ output with new production sources. Future copper
with drillship contracts, which are included in projected
prices are expected to be volatile and are likely to be influenced by
operating cash flows above.
demand from China and emerging markets, as well as economic
activity in the U.S. and other industrialized countries, the timing of
MARKETS
the development of new supplies of copper and production levels
Metals. World prices for copper, gold and molybdenum can
of mines and copper smelters.
fluctuate significantly. During the period from January 2006
through January 2016, the London Metal Exchange (LME) spot
copper price varied from a low of $1.26 per pound in 2008 to
a record high of $4.60 per pound in 2011; the London Bullion
Market Association (London) PM gold price fluctuated from

24
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

London Gold Prices affected by numerous factors beyond our control as described
Through January 31, 2016 further in our “Risk Factors” contained in Part I, Item 1A. of our
annual report on Form 10-K for the year ended December 31, 2015.
$1,950

$1,750 Crude Oil and Natural Gas Prices

$1,550 Through January 31, 2016

Dollars per ounce

$1,350
$16 $160
$1,150

$950 $14 $140

Natural Gas Price ($/MMBtu)

Brent Oil Prices ($/barrel)

$750 $12 $120

$550 $10 $100

$350
$8 $80
2006 2008 2010 2012 2014 2016
$6 $60

$4 $40
This graph presents London PM gold prices from January 2006
$2 $20
through January 2016. An improving economic outlook, stronger
2006 2008 2010 2012 2014 2016
U.S. dollar and positive equity performance contributed to lower
demand for gold in 2014 and 2015, resulting in lower prices. Brent Crude
NYMEX
During 2015, London PM gold prices ranged from a low of $1,049
per ounce to a high of $1,296 per ounce, averaged $1,160 per
This graph presents Brent crude oil prices and NYMEX natural gas
ounce and closed at $1,062 per ounce on December 31, 2015. Gold
contract prices from January 2006 through January 2016. Crude
prices closed at $1,231 per ounce on February 19, 2016.
oil prices reached a record high in July 2008 as economic growth
Metals Week Molybdenum Dealer Oxide Prices in emerging economies and the U.S. created high global demand
Through January 31, 2016 for oil and lower inventories. Since mid-2014, oil prices have
significantly declined associated with concerns of global oversupply.
$40
During 2015, the Brent crude oil price ranged from a low of
$35
$36.11 per barrel to a high of $67.77 per barrel, averaged $53.64
$30
per barrel and was $37.28 per barrel on December 31, 2015. The
Dollars per pound

$25 Brent crude oil price was $33.01 per barrel on February 19, 2016.
$20

$15 CRITICAL ACCOUNTING ESTIMATES

$10
$5
2006 2008 2010 2012 2014 2016
This graph presents the Metals Week Molybdenum Dealer Oxide
weekly average price from January 2006 through January 2016.
Molybdenum prices have declined since mid-2014 because of
weaker demand from global steel and stainless steel producers.
During 2015, the weekly average price for molybdenum
ranged from a low of $4.46 per pound to a high of $9.35 per
pound, averaged $6.66 per pound and was $5.23 per pound on
December 31, 2015. The Metals Week Molybdenum Dealer Oxide
weekly average price was $5.26 per pound on February 19, 2016.
Oil and Gas. Market prices for crude oil and natural gas can
fluctuate significantly. During the period from January 2006
through January 2016, the Brent crude oil price ranged from a low
of $27.88 per barrel in 2016 to a high of $146.08 per barrel in 2008
and the NYMEX natural gas contract price fluctuated from a low of
$2.03 per million British thermal units (MMBtu) in 2015 to a high
of $13.11 per MMBtu in 2008. Crude oil and natural gas prices are
Management’s Discussion and Analysis of Financial Condition
and Results of Operations is based on our consolidated financial
statements, which have been prepared in conformity with
generally accepted accounting principles (GAAP) in the U.S. The
preparation of these statements requires that we make estimates
and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. We base these estimates on
historical experience and on assumptions that we consider
reasonable under the circumstances; however, reported results
could differ from those based on the current estimates under
different assumptions or conditions. The areas requiring the use
of management’s estimates are also discussed in Note 1 under the
subheading “Use of Estimates.” Management has reviewed the
following discussion of its development and selection of critical
accounting estimates with the Audit Committee of our Board.

2015 ANNUAL REPORT 25

 MANAGEMENT’S DISCUSSION
AND ANALYSIS
Mineral Reserves. Recoverable proven and probable reserves
are the part of a mineral deposit that can be economically and
legally extracted or produced at the time of the reserve
determination. The determination of reserves involves numerous
uncertainties with respect to the ultimate geology of the ore
bodies, including quantities, grades and recovery rates.
Estimating the quantity and grade of mineral reserves requires
us to determine the size, shape and depth of our ore bodies by
analyzing geological data, such as samplings of drill holes,
tunnels and other underground workings. In addition to the
geology of our mines, assumptions are required to determine
the economic feasibility of mining these reserves, including
estimates of future commodity prices and demand, the mining
methods we use and the related costs incurred to develop and
mine our reserves. Our estimates of recoverable proven and
probable mineral reserves are prepared by and are the responsibility
of our employees. A majority of these estimates are reviewed
annually and verified by independent experts in mining, geology
and reserve determination.
At December 31, 2015, our consolidated estimated recoverable
proven and probable reserves were determined using long-term
average prices of $2.00 per pound for copper, $1,000 per ounce
for gold and $10 per pound for molybdenum. The following table
summarizes changes in our estimated consolidated recoverable
proven and probable copper, gold and molybdenum reserves
during 2015 and 2014:
Copper Gold Molybdenum a processing technologies. Mill and leach stockpiles are evaluated
(billion (million (billion
pounds) ounces) pounds)
Consolidated reserves at
December 31, 2013 111.2 31.3 3.26
Net additions/revisions (0.1) (0.6) (0.05)
Production (3.9) (1.2) (0.10)
Sale of Candelaria and
Ojos del Salado mines (3.7) (1.0) —
Consolidated reserves at
December 31, 2014 103.5 28.5 3.11
Net additions/revisions — (0.1) 0.03
Production (4.0) (1.3) (0.09)
Consolidated reserves at
December 31, 2015 99.5 27.1 3.05
a. Includes estimated recoverable metals contained in stockpiles. See below for
additional discussion of recoverable copper in stockpiles.
Refer to Note 20 for further information regarding estimated
recoverable proven and probable mineral reserves.
As discussed in Note 1, we depreciate our life-of-mine mining
and milling assets and values assigned to proven and probable
mineral reserves using the unit-of-production (UOP) method
based on our estimated recoverable proven and probable mineral
reserves. Because the economic assumptions used to estimate
mineral reserves may change from period to period and
additional geological data is generated during the course of
26
operations, estimates of reserves may change, which could have
a significant impact on our results of operations, including
changes to prospective depreciation rates and impairments of
long-lived asset carrying values. Excluding impacts associated
with changes in the levels of finished goods inventories and based
on projected copper sales volumes, if estimated copper reserves
at our mines were 10 percent higher at December 31, 2015, we
estimate that our annual depreciation, depletion and amortization
(DD&A) expense for 2016 would decrease by $76 million ($35
million to net income attributable to common stockholders), and a
10 percent decrease in copper reserves would increase DD&A
expense by $93 million ($43 million to net income attributable to
common stockholders). We perform annual assessments of our
existing assets in connection with the review of mine operating
and development plans. If it is determined that assigned asset
lives do not reflect the expected remaining period of benefit, any
change could affect prospective depreciation rates.
As discussed below and in Note 1, we review and evaluate our
long-lived assets for impairment when events or changes in
circumstances indicate that the related carrying amount of such
assets may not be recoverable, and changes to our estimates of
recoverable proven and probable mineral reserves could have an
impact on our assessment of asset recoverability.
Recoverable Copper in Stockpiles. We record, as inventory,
applicable costs for copper contained in mill and leach stockpiles
that are expected to be processed in the future based on proven
periodically to ensure that they are stated at the lower of
weighted-average cost or net realizable value (refer to Note 4 and
“Consolidated Results” for further discussion of inventory
adjustments recorded for the three years ended December 31,
2015). Accounting for recoverable copper from mill and leach
stockpiles represents a critical accounting estimate because
(i) it is generally impracticable to determine copper contained in
mill and leach stockpiles by physical count, thus requiring
management to employ reasonable estimation methods and
(ii) recovery rates from leach stockpiles can vary significantly.
Refer to Note 1 for further discussion of our accounting policy for
recoverable copper in stockpiles.
At December 31, 2015, estimated consolidated recoverable
copper was 3.8 billion pounds in leach stockpiles (with a carrying
value of $3.4 billion) and 1.0 billion pounds in mill stockpiles
(with a carrying value of $617 million), compared with 3.6 billion
pounds in leach stockpiles (with a carrying value of $3.6 billion)
and 0.9 billion pounds in mill stockpiles (with a carrying value of
$446 million) at December 31, 2014.
Impairment of Long-Lived Mining Assets. As discussed in Note 1,
we assess the carrying values of our long-lived mining assets
when events or changes in circumstances indicate that the
related carrying amounts of such assets may not be recoverable.
In evaluating our long-lived mining assets for recoverability, we
use estimates of pre-tax undiscounted future cash flows of our

individual mines. Estimates of future cash flows are derived from
current business plans, which are developed using near-term
metal price forecasts reflective of the current price environment
and management’s projections for long-term average metal
prices. In addition to near- and long-term metal price assumptions,
other key assumptions include estimates of commodity-based
and other input costs; proven and probable mineral reserves
estimates, including the timing and cost to develop and produce
the reserves; value beyond proven and probable mineral reserve
estimates (refer to Note 1); and the use of appropriate discount
rates in the measurement of fair value. We believe our estimates
and models used to determine fair value are similar to what a
market participant would use. As quoted market prices are
unavailable for our individual mining operations, fair value is
determined through the use of estimated discounted after-tax
future cash flows.
As a result of declining copper and molybdenum prices,
during 2015 we evaluated our long-lived mining assets for
impairment, which resulted in net charges of $37 million at our
Tyrone mine. The December 31, 2015, evaluations of the
recoverability of our copper mines were based on near-term
price assumptions reflecting prevailing copper futures prices,
ranging from $2.15 per pound to $2.17 per pound for COMEX and
from $2.13 per pound to $2.16 per pound for LME, and a long-
term average price of $3.00 per pound. If low copper prices
persist or decline further, we could incur potentially significant
additional impairments of our long-lived mining assets. The
December 31, 2015, evaluations of the recoverability of our
molybdenum mines used near-term price assumptions that are
consistent with current market prices for molybdenum and
a long-term average of $10 per pound. While continued low
molybdenum prices could result in impairments of our
molybdenum mines, we have incorporated changes in the
commercial pricing structure for our chemicals products to
promote continuation of chemical-grade production.
In addition to decreases in future metal price assumptions,
other events that could result in impairment of our long-lived
mining assets include, but are not limited to, decreases in
estimated recoverable proven and probable mineral reserves and
any event that might otherwise have a material adverse effect on
mine site production levels or costs.
Oil and Natural Gas Reserves. Proved reserves represent
quantities of oil and gas, which, by analysis of geoscience and
engineering data, can be estimated with reasonable certainty
to be economically producible from a given date forward, from
known reservoirs, and under existing economic conditions,
operating methods and government regulations. The term
“reasonable certainty” implies a high degree of confidence that
the quantities of oil and gas actually recovered will equal or
exceed the estimate. Engineering estimates of proved oil and
natural gas reserves directly impact financial accounting
MANAGEMENT’S DISCUSSION
AND ANALYSIS
estimates, including DD&A and the ceiling limitation under the full
cost method. Our proved reserve volumes have been determined
in accordance with the U.S. Securities and Exchange Commission
(SEC) guidelines, which require the use of an average price,
calculated as the twelve-month historical average of the first-day-
of-the-month historical reference price as adjusted for location
and quality differentials, unless prices are defined by contractual
arrangements, excluding escalations based upon future
conditions and the impact of derivative contracts. Our reference
prices for reserve determination are the West Texas Intermediate
(WTI) spot price for crude oil and the Henry Hub price for gas,
which were $50.28 per barrel of oil and $2.59 per MMBtu of
natural gas at December 31, 2015. These prices are held constant
throughout the life of the oil and gas properties, except where
such guidelines permit alternate treatment, including the use of
fixed and determinable contractual escalations. In accordance
with the guidelines and excluding the impact of derivative
instruments, the average realized prices used in our reserve
reports as of December 31, 2015, were $47.80 per barrel of oil and
$2.55 per thousand cubic feet (Mcf) of natural gas. Actual future
prices and costs may be materially higher or lower than the
average prices and costs as of the date of the reserves estimate.
There are numerous uncertainties inherent in estimating
quantities and values of proved oil and natural gas reserves and in
projecting future rates of production and the amount and timing
of development expenditures, including many factors beyond our
control. Future development and abandonment costs are
determined at least annually for each of our properties based
upon its geographic location, type of production structure, water
depth, reservoir depth and characteristics, currently available
procedures and consultations with engineering consultants.
Because these costs typically extend many years into the future,
estimating these future costs is difficult and requires management
to make judgments that are subject to future revisions based
upon numerous factors, including changing technology and the
political and regulatory environment. Reserve engineering is a
subjective process of estimating the recovery from underground
accumulations of oil and natural gas that cannot be measured
in an exact manner, and the accuracy of any reserve estimate is a
function of the quality of available data and of engineering and
geological interpretation and judgment. Because all reserve
estimates are to some degree subjective, the quantities of oil and
natural gas that are ultimately recovered, production and
operating costs, the amount and timing of future development
expenditures, and future oil and natural gas sales prices may all
differ from those assumed in our estimates. Refer to Note 21
for further information regarding estimated proved oil and natural
gas reserves.
Our average amortization rate per BOE was $33.46 in 2015, $39.74
for 2014 and $35.54 for 2013. Our oil and gas DD&A rate, after the
effect of the ceiling test impairments through December 31, 2015, is
expected to approximate $20 per BOE. Changes to estimates of
2015 ANNUAL REPORT 27
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
proved reserves and other factors could result in changes to the
prospective UOP amortization rate for our oil and gas properties,
which could have a significant impact on our results of operations.
Based on our estimated proved reserves and our net oil and
gas properties subject to amortization at December 31, 2015, a
10 percent increase in our costs subject to amortization would
increase our amortization rate by approximately $2 per BOE and
a 10 percent reduction to proved reserves would increase our
amortization rate by approximately $2 per BOE. Changes in
estimates of proved oil and natural gas reserves may also affect
our ceiling test calculation. Refer to Note 1 and “Impairment of
Oil and Gas Properties” below for further discussion.
Impairment of Oil and Gas Properties. As discussed in Note 1, we
follow the full cost method of accounting for our oil and gas
operations, whereby all costs associated with oil and gas property
acquisition, exploration and development activities are
capitalized and amortized to expense under the UOP method on a
country-by-country basis using estimates of proved oil and
natural gas reserves relating to each country where such activities
are conducted. The costs of unproved oil and gas properties are
excluded from amortization until the properties are evaluated.
Under full cost accounting rules, a “ceiling test” is conducted
each quarter to review the carrying value of our oil and gas
properties for impairment (refer to Note 1 for further discussion of
the ceiling test calculation). The SEC requires that the twelve-month
average of the first-day-of-the-month historical reference prices
be used to determine the ceiling test limitation. Such prices are
utilized except where different prices are fixed and determinable
from applicable contracts for the remaining term of those contracts.
The reference pricing in ceiling test impairment calculations may
cause results that do not reflect current market conditions that
exist at the end of an accounting period. For example, in periods
of increasing oil and gas prices, the use of a twelve-month
historical average price in the ceiling test calculation may result in
an impairment. Conversely, in times of declining prices, ceiling
test calculations may not result in an impairment.
Using WTI as the reference oil price, the average price was
$50.28 per barrel at December 31, 2015, compared with
$94.99 per barrel at December 31, 2014. Each quarter end since
September 30, 2014, net capitalized costs with respect to
FM O&G’s proved U.S. oil and gas properties have exceeded the
ceiling test limitation specified by the SEC’s full cost accounting
rules, which resulted in the recognition of impairment charges
totaling $13.0 billion in 2015 and $3.7 billion in 2014. In addition,
during 2015 impairment charges of $164 million were recorded for
international oil and gas properties, primarily related to Morocco
(refer to “Operations — Oil and Gas” for further discussion).
If the twelve-month historical average price in 2016 remains
below the December 31, 2015, twelve-month average of $50.28
per barrel, the ceiling test limitation will decrease, potentially
resulting in additional ceiling test impairments of our oil and gas
28
properties. The WTI spot oil price was $29.64 per barrel at
February 19, 2016.
If the trailing twelve-month average prices for the period ended
December 31, 2015, had been $46.03 per barrel of oil and $2.45
per MMBtu for natural gas, while all other inputs and assumptions
remained constant, an additional pre-tax impairment charge of
$0.6 billion would have been recorded to our oil and gas properties
in 2015. These oil and natural gas prices were determined using
a twelve-month simple average of the first-day-of-the-month for
the eleven months ended February 2016, and the February 2016
prices were held constant for the remaining one month. This
calculation solely reflects the impact of hypothetical lower oil and
natural gas prices on our ceiling test limitation and proved
reserves as of December 31, 2015. The oil and natural gas price is
a single variable in the estimation of our proved reserves, and
other factors, as described below, could have a significant impact
on future reserves and the present value of future cash flows.
In addition to declines in the trailing twelve-month average oil
and natural gas prices, other factors that could result in future
impairment of our oil and gas properties include costs transferred
from unevaluated properties to the full cost pool without
corresponding proved oil and natural gas reserve additions,
negative reserve revisions and the future incurrence of exploration,
development and production costs. During 2015, we transferred
$6.4 billion of costs associated with unevaluated properties to the
full cost pool, mostly reflecting impairment of the carrying values
of unevaluated properties. As FM O&G completes activities to
assess its unevaluated properties, related costs currently recorded
as unevaluated properties not subject to amortization will be
transferred to the full cost pool. If these activities do not result in
additions to discounted future net cash flows from proved oil and
natural gas reserves at least equal to the related costs transferred
(net of related tax effects), additional ceiling test impairments are
expected to result at current price levels.
At December 31, 2015, we had $4.8 billion of costs for unproved
oil and gas properties, which are excluded from amortization.
These costs will be transferred into the amortization base (i.e., full
cost pool) as the properties are evaluated and proved reserves
are established or if impairment is determined. We assess our
unproved properties periodically (at least annually), and if
impairment is indicated, the cumulative drilling costs incurred to
date for such property and all or a portion of the associated
leasehold costs are transferred to the full cost pool and subject to
amortization. Accordingly, an impairment of unproved properties
does not immediately result in the recognition of a charge to the
consolidated statements of income, but rather increases the costs
subject to amortization and the costs subject to the ceiling
limitation under the full cost accounting method. Following a review
of the carrying values of unevaluated properties during 2015,
FM O&G determined that the carrying values of certain of its

unevaluated properties were impaired primarily resulting from
declines in oil prices and changes in operating plans. The transfer
of costs into the amortization base involves a significant amount
of judgment and may be subject to changes over time based on
our drilling plans and results, geological and geophysical
evaluations, the assignment of proved reserves, availability of
capital and other factors.
Because the transfer of unevaluated property to the full cost
pool requires significant judgment and the ceiling test used to
evaluate impairment of our proved oil and gas properties requires
us to make several estimates and assumptions that are subject to
risk and uncertainty, changes in these estimates and assumptions
could result in the impairment of our oil and gas properties.
Events that could result in impairment of our oil and gas properties
include, but are not limited to, decreases in future crude oil and
natural gas prices, decreases in estimated proved oil and natural
gas reserves, increases in production, development or
abandonment costs and any event that might otherwise have a
material adverse effect on our oil and gas production levels or costs.
Environmental Obligations. Our current and historical operating
activities are subject to various national, state and local
environmental laws and regulations that govern the protection
of the environment, and compliance with those laws requires
significant expenditures. Environmental expenditures are
expensed or capitalized, depending upon their future economic
benefits. The guidance provided by U.S. GAAP requires that
liabilities for contingencies be recorded when it is probable that
obligations have been incurred, and the cost can be reasonably
estimated. At December 31, 2015, environmental obligations
recorded in our consolidated balance sheet totaled $1.2 billion,
which reflect obligations for environmental liabilities attributed
to the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA) or analogous state programs
and for estimated future costs associated with environmental
matters. Refer to Notes 1 and 12 for further discussion of
environmental obligations, including a summary of changes in
our estimated environmental obligations for the three years
ended December 31, 2015.
Accounting for environmental obligations represents a critical
accounting estimate because changes to environmental laws and
regulations and/or circumstances affecting our operations could
result in significant changes to our estimates, which could have a
significant impact on our results of operations. We perform a
comprehensive annual review of our environmental obligations
and also review changes in facts and circumstances associated
with these obligations at least quarterly. Judgments and estimates
are based upon currently available facts, existing technology,
presently enacted laws and regulations, remediation experience,
whether or not we are a potentially responsible party (PRP), the
ability of other PRPs to pay their allocated portions and take into
consideration reasonably possible outcomes. Our cost estimates
MANAGEMENT’S DISCUSSION
AND ANALYSIS
can change substantially as additional information becomes
available regarding the nature or extent of site contamination,
updated cost assumptions (including increases and decreases to
cost estimates), changes in the anticipated scope and timing of
remediation activities, the settlement of environmental matters,
required remediation methods and actions by or against
governmental agencies or private parties.
Asset Retirement Obligations. We record the fair value of our
estimated asset retirement obligations (AROs) associated with
tangible long-lived assets in the period incurred. Fair value is
measured as the present value of cash flow estimates after
considering inflation and a market risk premium. Our cost
estimates are reflected on a third-party cost basis and comply
with our legal obligation to retire tangible long-lived assets in the
period incurred. These cost estimates may differ from financial
assurance cost estimates for reclamation activities because of a
variety of factors, including obtaining updated cost estimates for
reclamation activities, the timing of reclamation activities,
changes in scope and the exclusion of certain costs not
considered reclamation and closure costs. At December 31, 2015,
AROs recorded in our consolidated balance sheet totaled
$2.8 billion, including $1.1 billion associated with our oil and gas
operations. Refer to Notes 1 and 12 for further discussion of
reclamation and closure costs, including a summary of changes in
our AROs for the three years ended December 31, 2015.
Generally, ARO activities are specified by regulations or in
permits issued by the relevant governing authority, and
management judgment is required to estimate the extent and
timing of expenditures. Accounting for AROs represents a critical
accounting estimate because (i) we will not incur most of these
costs for a number of years, requiring us to make estimates over a
long period, (ii) reclamation and closure laws and regulations
could change in the future and/or circumstances affecting our
operations could change, either of which could result in
significant changes to our current plans, (iii) the methods used or
required to plug and abandon non-producing oil and gas
wellbores; remove platforms, tanks, production equipment and
flow lines; and restore the wellsite could change, (iv) calculating
the fair value of our AROs requires management to estimate
projected cash flows, make long-term assumptions about inflation
rates, determine our credit-adjusted, risk-free interest rates
and determine market risk premiums that are appropriate for
our operations and (v) given the magnitude of our estimated
reclamation, mine closure and wellsite abandonment and
restoration costs, changes in any or all of these estimates could
have a significant impact on our results of operations.
2015 ANNUAL REPORT 29
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Taxes. In preparing our annual consolidated financial statements,
we estimate the actual amount of income taxes currently payable
or receivable as well as deferred income tax assets and liabilities
attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred income tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which these temporary
differences are expected to be recovered or settled. The effect on
deferred income tax assets and liabilities of a change in tax rates
or laws is recognized in income in the period in which such
changes are enacted.
Our operations are in multiple jurisdictions where uncertainties
arise in the application of complex tax regulations. Some of these
tax regimes are defined by contractual agreements with the local
government, while others are defined by general tax laws and
regulations. We and our subsidiaries are subject to reviews of
our income tax filings and other tax payments, and disputes can
arise with the taxing authorities over the interpretation of our
contracts or laws. The final taxes paid may be dependent upon
many factors, including negotiations with taxing authorities.
In certain jurisdictions, we must pay a portion of the disputed
amount to the local government in order to formally appeal
the assessment. Such payment is recorded as a receivable if we
believe the amount is collectible.
A valuation allowance is provided for those deferred income
tax assets for which the weight of available evidence suggests
that the related benefits will not be realized. In determining the
amount of the valuation allowance, we consider estimated future
taxable income or loss as well as feasible tax planning strategies
in each jurisdiction. If we determine that we will not realize all
or a portion of our deferred income tax assets, we will increase
our valuation allowance. Conversely, if we determine that we
will ultimately be able to realize all or a portion of the related
benefits for which a valuation allowance has been provided, all or
a portion of the related valuation allowance will be reduced.
At December 31, 2015, our valuation allowances totaled
$4.2 billion, covering U.S. federal and state deferred tax assets,
including all of our U.S. foreign tax credit carryforwards, U.S.
minimum tax credit carryforwards, foreign net operating loss
carryforwards, and a portion of our U.S. federal and state net
operating loss carryforwards. Refer to “Consolidated Results —
Income Taxes” for discussion of tax charges recorded in 2015
associated with the impairment of U.S. oil and gas properties.
At December 31, 2014, valuation allowances totaled $2.4 billion,
and covered a portion of our U.S. foreign tax credit carryforwards,
foreign net operating loss carryforwards, U.S. state net
operating loss carryforwards and U.S. state deferred tax assets.
Refer to Note 11 for further discussion.

CONSOLIDATED RESULTS

Years Ended December 31, 2015 2014a 2013a,b

SUMMARY FINANCIAL DATA (in millions, except per share amounts)

Revenuesc,d,e $ 15,877 $ 21,438 $ 20,921
Operating (loss) incomec,d,e,f,g $ (13,382)h,i,j,k $ 97h,i,k $ 5,351l
Net (loss) income attributable to common stockholdersd,e,f,g,m $ (12,236)h,i,j,k,n $ (1,308)h,i,k,o,p $ 2,658l,o,p,q
Diluted net (loss) income per share attributable to common stockholdersd,e,f,g,m $ (11.31)h,i,j,k,n $ (1.26)h,i,k,o,p $ 2.64l,o,p,q
Diluted weighted-average common shares outstanding 1,082 1,039 1,006
Operating cash flowsr $ 3,220 $ 5,631 $ 6,139
Capital expenditures $ 6,353 $ 7,215 $ 5,286
At December 31:
Cash and cash equivalents $ 224 $ 464 $ 1,985
Total debt, including current portion $ 20,428 $ 18,849s $ 20,618s
a. Includes the results of the Candelaria and Ojos del Salado mines prior to their sale in November 2014, and the results of Eagle Ford prior to its sale in June 2014.
b. Includes the results of FM O&G beginning June 1, 2013.

30
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

c. As further detailed in Note 16, following is a summary of revenues and operating income (loss) by operating division (in millions):

Years Ended December 31, 2015 2014 2013

Revenues
North America copper mines $ 5,126 $ 5,616 $ 5,183
South America mining 1,934 3,532 4,485
Indonesia mining 2,653 3,071 4,087
Africa mining 1,384 1,558 1,637
Molybdenum mines 348 587 522
Rod & Refining 4,154 4,655 5,022
Atlantic Copper Smelting & Refining 1,970 2,412 2,041
U.S. Oil & Gas operations 1,994 4,710 2,616
Other mining, corporate, other & eliminations (3,686) (4,703) (4,672)
Total revenues $ 15,877 $ 21,438 $ 20,921
Operating income (loss)
North America copper mines $ 648 $ 1,698 $ 1,506
South America mining 67 1,220 2,063
Indonesia mining 449 719 1,420
Africa mining 256 548 625
Molybdenum mines (72) 167 123
Rod & Refining 16 12 23
Atlantic Copper Smelting & Refining 67 (2) (75)
U.S. Oil & Gas operations (14,189) (4,479) 450
Other mining, corporate, other & eliminations (624) 214 (784)
Total operating (loss) income $ (13,382) $ 97 $ 5,351

d. Includes unfavorable adjustments to provisionally priced concentrate and cathode copper sales recognized in prior periods totaling $107 million ($53 million to net loss attributable to
common stockholders or $0.05 per share) in 2015, $118 million ($65 million to net loss attributable to common stockholders or $0.06 per share) in 2014 and $26 million ($12 million to net
income attributable to common stockholders or $0.01 per share) in 2013. Refer to “Revenues” for further discussion. 
e. Includes net noncash mark-to-market (losses) gains associated with crude oil and natural gas derivative contracts totaling $(319) million ($(198) million to net loss attributable to
common stockholders or $(0.18) per share) in 2015, $627 million ($389 million to net loss attributable to common stockholders or $0.37 per share) in 2014 and $(312) million ($(194) million
to net income attributable to common stockholders or $(0.19) per share) for the seven-month period from June 1, 2013, to December 31, 2013. Refer to “Revenues” for further discussion.
f. Includes net charges for adjustments to environmental obligations and related litigation reserves of $43 million ($28 million to net loss attributable to common stockholders or
$0.03 per share) in 2015, $76 million ($50 million to net loss attributable to common stockholders or $0.05 per share) in 2014 and $19 million ($17 million to net income attributable to
common stockholders or $0.02 per share) in 2013.
g. Includes charges at mining operations for adjustments to copper and molybdenum inventories totaling $338 million ($217 million to net loss attributable to common stockholders or
$0.20 per share) in 2015, and for adjustments to molybdenum inventories totaling $6 million ($4 million to net loss attributable to common stockholders or less than $0.01 per share) in
2014 and $3 million ($2 million to net income attributable to common stockholders or less than $0.01 per share) in 2013.
h. Includes charges to reduce the carrying value of oil and gas properties pursuant to full cost accounting rules of $13.1 billion ($11.6 billion to net loss attributable to common stockholders
or $10.72 per share) in 2015 and $3.7 billion ($2.3 billion to net loss attributable to common stockholders or $2.24 per share) in 2014. The year 2014 also includes an impairment charge of
$1.7 billion ($1.7 billion to net loss attributable to common stockholders or $1.65 per share) for the full carrying value of goodwill. As a result of the impairment to U.S. oil and gas properties,
we recorded tax charges of $3.3 billion in 2015 to establish valuation allowances against U.S. federal and state deferred tax assets that will not generate a future benefit. These tax
charges have been reflected in the after tax impacts for the impairment of oil and gas properties in 2015.
i. Includes charges at oil and gas operations totaling $188 million ($117 million to net loss attributable to common stockholders or $0.11 per share) in 2015, primarily for other asset
impairments and inventory write-downs, idle/terminated rig costs and prior year non-income tax assessments related to the California properties, and $46 million ($29 million to net loss
attributable to common stockholders or $0.03 per share) in 2014, primarily for idle/terminated rig costs and inventory write-downs.
j. The year 2015 includes charges at mining operations for impairment, restructuring and other net charges totaling $156 million ($94 million to net loss attributable to common stockholders
or $0.09 per share) and charges for executive retirement benefits totaling $18 million ($12 million to net loss attributable to common stockholders or $0.01 per share).
k. Includes net gains on sales of assets of $39 million ($25 million to net loss attributable to common stockholders or $0.02 per share) in 2015 associated with the sale of our one-third
interest in the Luna Energy power facility and $717 million ($481 million to net loss attributable to common stockholders or $0.46 per share) in 2014 primarily from the sale of our
80 percent interests in the Candelaria and Ojos del Salado mines.
l. The year 2013 includes charges of (i) $80 million ($50 million to net income attributable to common stockholders or $0.05 per share) for transaction and related costs associated with the
oil and gas acquisitions, (ii) $76 million ($49 million to net income attributable to common stockholders or $0.05 per share) associated with updated mine plans at Morenci that resulted
in a loss in recoverable leach stockpiles, (iii) $37 million ($23 million to net income attributable to common stockholders or $0.02 per share) for restructuring an executive employment
arrangement and (iv) $36 million ($13 million to net income attributable to common stockholders or $0.01 per share) associated with Cerro Verde’s new labor agreements.
m. We defer recognizing profits on intercompany sales until final sales to third parties occur. Refer to “Operations — Smelting & Refining” for a summary of net impacts from changes in
these deferrals.
n. The year 2015 includes a gain of $92 million ($92 million to net loss attributable to common stockholders or $0.09 per share) related to net proceeds received from insurance carriers and
other third parties related to the shareholder derivative litigation settlement.
o. Includes net gains (losses) on early extinguishment of debt totaling $73 million ($3 million to net loss attributable to common stockholders or less than $0.01 per share) in 2014 and
$(35) million ($(28) million to net income attributable to common stockholders or $(0.03) per share) in 2013. Refer to Note 8 for further discussion.
p. Includes net tax charges of $103 million ($0.10 per share) in 2014 and net tax benefits of $199 million ($0.20 per share) in 2013. Refer to Note 11 and “Provision for Income Taxes” below
for further discussion.
q. The year 2013 includes a gain of $128 million ($128 million to net income attributable to common stockholders or $0.13 per share) related to our preferred stock investment in and the
subsequent acquisition of McMoRan Exploration Co. (MMR).
r. Includes net working capital sources (uses) and changes in other tax payments of $373 million in 2015, $(632) million in 2014 and $(377) million in 2013.
s. Amounts restated to reflect adoption of new accounting guidance for debt issuance costs, which reduced total debt and assets by $121 million in 2014 and $88 million in 2013.

31
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Years Ended December 31, 2015 2014a,b 2013a,b,c

SUMMARY OPERATING DATA

Copper
Production (millions of recoverable pounds) 4,017 3,904 4,131
Sales, excluding purchases (millions of recoverable pounds) 4,070 3,888 4,086
Average realized price per pound $ 2.42 $ 3.09 $ 3.30
Site production and delivery costs per poundd $ 1.78 $ 1.90 $ 1.88
Unit net cash costs per poundd $ 1.53 $ 1.51 $ 1.49
Gold
Production (thousands of recoverable ounces) 1,257 1,214 1,250
Sales, excluding purchases (thousands of recoverable ounces) 1,247 1,248 1,204
Average realized price per ounce $ 1,129 $ 1,231 $ 1,315
Molybdenum
Production (millions of recoverable pounds) 92 95 94
Sales, excluding purchases (millions of recoverable pounds) 89 95 93
Average realized price per pound $ 8.70 $ 12.74 $ 11.85
Oil Equivalents
Sales volumes:
MMBOE 52.6 56.8 38.1
Thousand BOE (MBOE) per day 144 156 178
Cash operating margin per BOE:e
Realized revenues $ 43.54 $ 71.83 $ 76.87
Cash production costs 18.59 20.08 17.14
Cash operating margin $ 24.95 $ 51.75 $ 59.73

a. Includes the results of the Candelaria and Ojos del Salado mines prior to their sale in November 2014. Sales volumes from the Candelaria and Ojos del Salado mines totaled 268 million
pounds of copper and 67 thousand ounces of gold in 2014 and 424 million pounds of copper and 102 thousand ounces of gold in 2013.
b. Includes the results of Eagle Ford prior to its sale in June 2014. Sales volumes from Eagle Ford totaled 8.7 MMBOE (24 MBOE per day) in 2014; excluding Eagle Ford, oil and gas cash
production costs were $21.36 per BOE for the year 2014. Sales volumes from Eagle Ford totaled 9.9 MMBOE (46 MBOE per day) in 2013; excluding Eagle Ford, oil and gas cash production
costs were $18.95 per BOE for the year 2013.
c. Includes the results of FM O&G beginning June 1, 2013.
d. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, excluding net noncash and other costs.
For reconciliations of the per pound unit costs by operating division to production and delivery costs applicable to sales reported in our consolidated financial statements, refer to
“Product Revenues and Production Costs.”
e. Cash operating margin for oil and gas operations reflects realized revenues less cash production costs. Realized revenues exclude noncash mark-to-market adjustments on derivative
contracts, and cash production costs exclude accretion and other costs. For reconciliations of realized revenues and cash production costs per BOE to revenues and production and
delivery costs reported in our consolidated financial statements, refer to “Product Revenues and Production Costs.”

32

Revenues
Consolidated revenues totaled $15.9 billion in 2015, $21.4 billion
in 2014 and $20.9 billion in 2013. Revenues include the sale
of copper concentrate, copper cathode, copper rod, gold,
molybdenum, silver and cobalt, and beginning June 1, 2013,
the sale of oil, natural gas and NGLs by our oil and gas
operations. Our consolidated revenues for 2015 include sales of
copper (67 percent), oil (11 percent), gold (10 percent) and
molybdenum (5 percent). Following is a summary of changes in
our consolidated revenues between periods (in millions):
2015 2014
Consolidated revenues – prior year $ 21,438 $ 2 0,921
Mining operations:
Higher (lower) sales volumes from
mining operations:
Copper 562 (650)
Gold (1) 58
Molybdenum (72) 17
(Lower) higher price realizations from
mining operations:
Copper (2,727) (817)
Gold (127) (105)
Molybdenum (360) 84
Net adjustments for prior year
provisionally priced copper sales 11 (92)
Lower revenues from purchased copper (95) (361)
(Lower) higher Atlantic Copper revenues (442) 371
Oil and gas operations:
Lower oil sales volumes (438) — a
Lower oil average realized prices,
including cash gains (losses) on
derivative contracts (1,159) — a
Higher oil and gas revenues, including
cash losses on derivative contracts — 1,155
Net noncash mark-to-market adjustments
on derivative contracts (946) 939
Other, including intercompany eliminations 233 (82)
Consolidated revenues – current year $ 15,877 $ 21,438
a. Oil sales volumes and realized prices for the year 2014, are not comparable to the
year 2013, as 2013 only includes FM O&G’s results beginning June 1, 2013.
Mining Operations
Sales Volumes. Consolidated sales volumes from our mines
totaled 4.1 billion pounds of copper, 1.25 million ounces of gold
and 89 million pounds of molybdenum in 2015; 3.9 billion pounds
of copper, 1.25 million ounces of gold and 95 million pounds of
molybdenum in 2014; and 4.1 billion pounds of copper, 1.2 million
ounces of gold and 93 million pounds of molybdenum in 2013.
Higher consolidated copper sales volumes in 2015, compared with
2014, primarily reflect higher volumes from North America
associated with increased production from the Morenci mill
expansion project and higher ore grades at the Chino mine, and
higher volumes from Indonesia associated with higher mill
throughput because of export restrictions in 2014, partly offset by
lower volumes from South America as a result of the sale of the
Candelaria and Ojos del Salado mines in November 2014.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
Lower consolidated copper sales volumes in 2014, compared
with 2013, primarily reflect decreased volumes in Indonesia
and South America, partly offset by higher volumes from our
North America copper mines.
Refer to “Operations” for further discussion of sales volumes
at our operating divisions.
Metal Price Realizations. Our consolidated revenues can vary
significantly as a result of fluctuations in the market prices of
copper, gold and molybdenum, and to a lesser extent silver and
cobalt. Our average realized prices were 22 percent lower for
copper, 8 percent lower for gold and 32 percent lower for
molybdenum in 2015, compared with 2014. In 2014, our average
realized prices for copper and gold were 6 percent lower,
compared with 2013, and our average realized price for
molybdenum was 8 percent higher, compared with 2013.
Provisionally Priced Copper Sales. Impacts of net adjustments for
prior year provisionally priced sales primarily relate to copper
sales. Substantially all of our copper concentrate and cathode
sales contracts provide final copper pricing in a specified future
month (generally one to four months from the shipment date)
based primarily on quoted LME monthly average spot copper
prices (refer to “Disclosures About Market Risks—Commodity
Price Risk” for further discussion). Revenues include unfavorable
net adjustments to prior years’ provisionally priced copper sales
totaling $107 million in 2015, $118 million in 2014 and $26 million
in 2013.
Purchased Copper. We purchased copper cathode for processing
by our Rod & Refining segment totaling 121 million pounds in
2015, 125 million pounds in 2014 and 223 million pounds in 2013.
Lower purchased copper revenues in 2015, compared with 2014,
primarily reflect lower copper prices. Lower purchased copper
revenues in 2014, compared with 2013, primarily reflect lower
purchased copper volumes and prices.
Atlantic Copper Revenues. Lower Atlantic Copper revenues in
2015, compared with 2014, primarily reflect lower copper prices.
Higher Atlantic Copper revenues in 2014, compared with 2013,
primarily reflect the impact of a major maintenance turnaround in
2013.
Oil & Gas Operations
Sales Volumes. Oil sales volumes totaled 35.3 MMBbls in 2015,
40.1 MMBbls in 2014, and 26.6 MMBbls for the seven-month
period from June 1, 2013, to December 31, 2013. Oil sales volumes
were lower in 2015, compared with 2014, primarily reflecting the
sale of the Eagle Ford shale assets in June 2014, partly offset by
higher volumes in the GOM. Oil sales volumes for 2014, were
higher than sales volumes for the seven-month period from
June 1, 2013, to December 31, 2013, primarily reflecting a full year
of production in 2014.
2015 ANNUAL REPORT 33
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
Refer to “Operations” for further discussion of sales volumes at
our oil and gas operations.
Realized Oil Prices and Derivative Contracts. Our average realized
price for oil (excluding the impact of derivative contracts) of $45.58
per barrel in 2015 was 51 percent lower than our average realized
price of $92.76 per barrel in 2014. Our average realized price for oil
(excluding the impact of derivative contracts) in 2014 was 7 percent
lower than our average realized price of $99.67 per barrel for the
seven-month period from June 1, 2013, to December 31, 2013.
In connection with the acquisition of our oil and gas business,
we had derivative contracts for 2015 consisting of crude oil
options, and for 2014 and 2013, we had derivative contracts that
consisted of crude oil options, and crude oil and natural gas
swaps (refer to Note 14 for further discussion of oil and gas
derivative contracts). These crude oil and natural gas derivative
contracts were not designated as hedging instruments;
accordingly, they were recorded at fair value with the mark-to-
market gains and losses recorded in revenues each period. Cash
gains (losses) on crude oil and natural gas derivative contracts
totaled $406 million in 2015, compared with $(122) million in
2014 and $(22) million for the seven-month period from June 1,
2013, to December 31, 2013. Net noncash mark-to-market (losses)
gains on crude oil and natural gas derivative contracts totaled
$(319) million in 2015, compared with $627 million for 2014 and
$(312) million for the seven-month period from June 1, 2013, to
December 31, 2013. FM O&G currently has no derivative contracts
in place for 2016 and future years.
Production and Delivery Costs
Consolidated production and delivery costs totaled $11.5 billion
in 2015, $11.9 billion in 2014 and $11.8 billion in 2013. Consolidated
production and delivery costs in 2015 include asset impairment,
restructuring and other net charges at mining operations totaling
$156 million and charges at oil and gas operations totaling
$188 million, primarily for other asset impairments and inventory
write-downs, idle/terminated rig costs and prior year non-income
tax assessments related to the California properties. Consolidated
production and delivery costs in 2014 include charges at oil and
gas operations totaling $46 million, primarily for idle/terminated
rig costs and inventory write-downs. Excluding these amounts,
lower production and delivery costs from mining operations
in 2015, compared with 2014, primarily reflect lower costs at our
South America mines as a result of the sale of the Candelaria
and Ojos del Salado mines in November 2014 and lower diesel
costs in Indonesia, partly offset by higher costs at our North America
mines associated with higher volumes. Lower oil and gas
production and delivery costs in 2015, compared with 2014,
primarily reflect the sale of Eagle Ford in June 2014 and lower
well workover expense and steam costs in California.
34
Higher production and delivery costs for 2014, compared with
2013, were primarily associated with our oil and gas operations,
which include a full year of results for 2014, partly offset by lower
costs for our mining operations mostly associated with lower
volumes in South America and Indonesia.
Mining Unit Site Production and Delivery Costs
Site production and delivery costs for our copper mining
operations primarily include labor, energy and commodity-based
inputs, such as sulphuric acid, reagents, liners, tires and
explosives. Consolidated unit site production and delivery costs
(before net noncash and other costs) for our copper mines
averaged $1.78 per pound of copper in 2015, $1.90 per pound in
2014 and $1.88 per pound in 2013. Lower consolidated unit site
production and delivery costs in 2015, compared with 2014,
primarily reflects higher copper sales volumes in North America
and Indonesia. Higher consolidated unit site production and
delivery costs in 2014, compared with 2013, primarily reflects the
impact of lower copper sales volumes in South America and
Indonesia, partly offset by higher volumes in North America.
Refer to “Operations — Unit Net Cash Costs” for further discussion
of unit net cash costs associated with our operating divisions,
and to “Product Revenues and Production Costs” for reconciliations
of per pound costs by operating division to production and
delivery costs applicable to sales reported in our consolidated
financial statements.
Our copper mining operations require significant energy,
principally diesel, electricity, coal and natural gas, most of which
is obtained from third parties under long-term contracts. Energy
represented 17 percent of our consolidated copper production
costs in 2015, including purchases of approximately 250 million
gallons of diesel fuel; 7,600 gigawatt hours of electricity at our
North America, South America and Africa copper mining
operations (we generate all of our power at our Indonesia mining
operation); 800 thousand metric tons of coal for our coal power
plant in Indonesia; and 1 MMBtu of natural gas at certain of our
North America mines. Based on current cost estimates, we
estimate energy will approximate 20 percent of our consolidated
copper production costs for 2016.
Oil and Gas Production Costs per BOE
Production costs for our oil and gas operations primarily include
costs incurred to operate and maintain wells and related
equipment and facilities, such as lease operating expenses, steam
gas costs, electricity, production and ad valorem taxes, and
gathering and transportation expenses. Cash production costs for
our oil and gas operations averaged $18.59 per BOE in 2015,
$20.08 per BOE in 2014 and $17.14 for the seven-month period
from June 1, 2013, to December 31, 2013. Lower cash production
costs in 2015, compared with 2014, primarily reflect lower well
workover expense and steam costs in California. Higher cash
production costs in 2014, compared with 2013, primarily reflect

the sale of lower cost Eagle Ford properties in June 2014 and
higher operating costs in California and the GOM. Refer to
“Operations” for further discussion of cash production costs at
our oil and gas operations.
Depreciation, Depletion and Amortization
Depreciation will vary under the UOP method as a result of
changes in sales volumes and the related UOP rates at our mining
and oil and gas operations. Consolidated DD&A totaled $3.5 billion
in 2015, $3.9 billion in 2014 and $2.8 billion in 2013. DD&A from
our oil and gas operations was $487 million lower in 2015,
compared with 2014, primarily reflecting lower DD&A rates as a
result of impairments of oil and gas properties, and DD&A from
our mining operations was $121 million higher in 2015, compared
with 2014, mostly associated with higher sales volumes in
North America and Indonesia.
Higher DD&A in 2014, compared with 2013, was primarily
associated with a full year of expense for oil and gas operations
($2.3 billion in 2014, compared with $1.4 billion for the seven-
month period from June 1, 2013, to December 31, 2013).
Impairment of Oil and Gas Properties
Under the full cost accounting rules, a “ceiling test” is conducted
each quarter to review the carrying value of the oil and gas
properties for impairment. Each quarter end since September 30,
2014, net capitalized costs with respect to our proved U.S. oil and
gas properties have exceeded the related ceiling test limitation,
which resulted in the recognition of impairment charges totaling
$13.0 billion in 2015 and $3.7 billion in 2014. During 2015 we also
recognized impairment charges of $164 million for international
oil and gas properties, primarily related to unsuccessful
exploration activities in Morocco. Refer to Note 1 and “Critical
Accounting Estimates” for further discussion, including discussion
of potentially significant additional ceiling test impairments.
Copper and Molybdenum Inventory Adjustments
Lower copper and molybdenum prices resulted in adjustments to
inventory carrying values totaling $338 million in 2015 for copper
and molybdenum, and $6 million in 2014 and $3 million in 2013 for
molybdenum. Refer to Notes 1 and 4 for further discussion.
Selling, General and Administrative Expenses
Consolidated selling, general and administrative expenses totaled
$569 million in 2015, $592 million in 2014 and $657 million in
2013. Lower consolidated selling, general and administrative
expenses, compared with 2014, primarily reflects lower incentive
compensation, partly offset by a charge totaling $18 million for
executive retirement benefits in 2015. Excluding amounts for our
oil and gas operations ($207 million in 2014 and $120 million for
the seven-month period from June 1, 2013, to December 31, 2013),
selling, general and administrative expenses were lower in 2014,
compared with 2013, primarily because of transaction and related
costs incurred during 2013 totaling $80 million associated with
the oil and gas acquisitions.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
We expect selling, general and administrative expenses to
decline further in 2016, compared with 2015, as a result of
ongoing initiatives to reduce costs.
Consolidated selling, general and administrative expenses
exclude capitalized general and administrative expenses at our oil
and gas operations totaling $124 million in 2015, $143 million in
2014 and $67 million for the seven-month period from June 1, 2013,
to December 31, 2013.
Mining Exploration and Research Expenses
Consolidated exploration and research expenses for our mining
operations totaled $127 million in 2015, $126 million in 2014 and
$210 million in 2013. Our exploration activities are generally near
our existing mines with a focus on opportunities to expand
reserves and resources to support development of additional
future production capacity in the large mineral districts where we
currently operate. Exploration results continue to indicate
opportunities for what we believe could be significant future
potential reserve additions in North and South America, and in
the Tenke minerals district. The drilling data in North America
also indicates the potential for significantly expanded sulfide
production. Drilling results and exploration modeling provide a
long-term pipeline for future growth in reserves and production
capacity in an established minerals district.
Exploration spending continues to be reduced from historical
levels as a result of market conditions and is expected to
approximate $52 million in 2016.
As further discussed in Note 1, exploration costs for our oil and
gas operations are capitalized to oil and gas properties.
Environmental Obligations and Shutdown Costs
Environmental obligation costs reflect net revisions to our long-
term environmental obligations, which vary from period to period
because of changes to environmental laws and regulations, the
settlement of environmental matters and/or circumstances
affecting our operations that could result in significant changes
in our estimates (refer to “Critical Accounting Estimates —
Environmental Obligations” for further discussion). Shutdown
costs include care and maintenance costs and any litigation,
remediation or related expenditures associated with closed
facilities or operations. Net charges for environmental obligations
and shutdown costs totaled $78 million in 2015, $119 million in
2014 and $66 million in 2013. Refer to Note 12 for further
discussion of environmental obligations and litigation matters.
Goodwill Impairment
As further discussed in Notes 1 and 2, the fourth-quarter
2014 goodwill assessment resulted in an impairment charge of
$1.7 billion for the full carrying value of goodwill.
2015 ANNUAL REPORT 35
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Net Gain on Sales of Assets
Net gain on sales of assets totaled $39 million in 2015 related to
the sale of our one-third interest in the Luna Energy power facility
in New Mexico and $717 million in 2014 primarily related to
the sale of our 80 percent interests in the Candelaria and Ojos del
Salado mines. Refer to Note 2 for further discussion.
Interest Expense, Net
Consolidated interest expense (excluding capitalized interest)
totaled $860 million in 2015, $866 million in 2014 and $692 million
in 2013. Higher interest expense in 2015 and 2014, compared
with 2013, reflects higher borrowings related to the oil and
gas acquisitions.
Capitalized interest varies with the level of expenditures for
our development projects and average interest rates on our
borrowings, and totaled $215 million in 2015, $236 million in 2014
and $174 million in 2013. Refer to “Operations” and “Capital
Resources and Liquidity — Investing Activities” for further
discussion of current development projects.
termination of the bridge loan facilities for the oil and gas
acquisitions, partly offset by a gain on the redemption of MMR’s
remaining outstanding 11.875% Senior Notes. Refer to Note 8
for further discussion.
Gain on Investment in MMR
During 2013, we recorded a gain totaling $128 million related
to the carrying value of our preferred stock investment in
and the subsequent acquisition of MMR. Refer to Note 2 for
further discussion.
Other Income (Expense), Net
Other income (expense) primarily includes foreign currency
translation adjustments and interest income, and totaled $6
million in 2015, $36 million in 2014 and $(13) million in 2013. The
year 2015 also includes a gain of $92 million associated with net
proceeds received from insurance carriers and other third parties
related to the shareholder derivative litigation (refer to Note 12
for further discussion).

Income Taxes
Net Gain (Loss) on Early Extinguishment of Debt
Following is a summary of the approximate amounts used in the
Net gains (losses) on early extinguishment of debt totaled
calculation of our consolidated benefit from (provision for)
$73 million in 2014, primarily related to senior note redemptions
income taxes for the years ended December 31 (in millions,
and tender offers and $(35) million in 2013, associated with the
except percentages):

2015 2014
Income Tax Income Tax
Income Effective (Provision) Income Effective (Provision)
(Loss)a Tax Rate Benefit (Loss)a Tax Rate Benefit

U.S. $ (1,654)b 44% $ 720 $ 1,857 30% $ (550)c,d

South America (40) (10)% (4) 1,221 43% (531)e
Indonesia 430 45% (195) 709 41% (293)
Africa 120 40% (48) 379 31% (116)
Impairment of oil and gas properties (13,144) 37% 4,884 (3,737) 38% 1,413
Valuation allowance, net — N/A (3,338)f — N/A —
Gain on sale of Candelaria and Ojos del Salado — N/A — 671 33% (221)
Eliminations and other 267 N/A (84) 193 N/A (26)
(14,021) 14%h 1,935 1,293 25% (324)
Goodwill impairment — N/A — (1,717)g N/A —
Consolidated FCX $ (14,021) 14%h $ 1,935 $ (424) (76)% $ (324)
a. Represents income (loss) by geographic location before income taxes and equity in affiliated companies’ net (losses) earnings.
b. Includes a gain of $92 million related to net proceeds received from insurance carriers and other third parties related to the shareholder derivative litigation settlement for which there
is no related tax provision.
c. Includes a charge for deferred taxes recorded in connection with the allocation of goodwill to the sale of Eagle Ford shale assets totaling $84 million.
d. Includes a net benefit of $41 million, comprised of $57 million related to changes in U.S. state income tax filing positions, partly offset by a charge of $16 million for a change in U.S.
federal income tax law regulations.
e. Includes charges related to changes in Chilean and Peruvian tax rules totaling $78 million ($60 million net of noncontrolling interests).
f. As a result of the impairment to U.S. oil and gas properties, we recorded tax charges to establish valuation allowances against U.S. federal and state deferred tax assets that will not
generate a future benefit.
g. Reflects goodwill impairment charges, which were non-deductible for tax purposes.
h. Our consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Accordingly, variations in the relative proportions
of jurisdictional income result in fluctuations to our consolidated effective income tax rate. Assuming achievement of current sales volume and cost estimates and average prices of
$2.00 per pound for copper, $1,100 per ounce for gold, $4.50 per pound for molybdenum and $34 per barrel of Brent crude oil for 2016, we estimate our consolidated effective tax rate for
the year 2016 will approximate 40 percent excluding U.S. domestic losses for which no benefit is expected to be realized.

36

Following is a summary of the approximate amounts used in the
calculation of our consolidated provision for income taxes for the
year ended December 31 (in millions, except percentages):
2013
Income Tax
Effective (Provision)
Incomea Tax Rate Benefit
U.S. $ 1,080 23% $ (243)
South America 2,021 36% (720)
Indonesia 1,370 44% (603)
Africa 425 31% (131)
Eliminations and other 17 N/A 23
4,913 34% (1,674)
Adjustments — N/A 199 b
Consolidated FCX $ 4,913 30% $ (1,475)
a. Represents income by geographic location before income taxes and equity in
affiliated companies’ net earnings.
b. Reflects net reductions in our deferred tax liabilities and deferred tax asset valuation
allowances resulting from the oil and gas acquisitions.
Refer to Note 11 for further discussion of income taxes.
OPERATIONS
North America Copper Mines
We operate seven open-pit copper mines in North America —
Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and
Chino and Tyrone in New Mexico. All of the North America mining
operations are wholly owned, except for Morenci. We record our
85 percent joint venture interest in Morenci using the proportionate
consolidation method.
As further discussed in Note 18, we have entered into a definitive
agreement to sell a 13 percent undivided interest in Morenci.
Following completion of the transaction, we will own a 72 percent
undivided interest in Morenci.
The North America copper mines include open-pit mining,
sulfide ore concentrating, leaching and solution extraction/
electrowinning (SX/EW) operations. A majority of the copper
produced at our North America copper mines is cast into copper
rod by our Rod & Refining segment. The remainder of our North
America copper sales is in the form of copper cathode or copper
concentrate, a portion of which is shipped to Atlantic Copper
(our wholly owned smelter). Molybdenum concentrate and silver
are also produced by certain of our North America copper mines.
Operating and Development Activities. We have significant
undeveloped reserves and resources in North America and a
portfolio of potential long-term development projects. In the near
term, we are deferring developing new projects as a result of
current market conditions. Future investments will be undertaken
based on the results of economic and technical feasibility studies
and market conditions.
The Morenci mill expansion project, which commenced
operations in May 2014, successfully achieved full rates in
second-quarter 2015. The project expanded mill capacity from
MANAGEMENT’S DISCUSSION
AND ANALYSIS
50,000 metric tons of ore per day to approximately 115,000 metric
tons of ore per day, which results in incremental annual
production of approximately 225 million pounds of copper and an
improvement in Morenci’s cost structure. Over the next five years,
Morenci’s copper production, including our joint venture partner
share, is expected to average approximately one billion pounds
per year.
Our revised operating plans for the North America copper
mines incorporate reductions in mining rates to reduce operating
and capital costs, including the suspension of mining operations
at the Miami mine (which produced 43 million pounds of copper for
the year 2015), the suspension of production at the Sierrita mine
(which produced 189 million pounds of copper and 21 million
pounds of molybdenum for the year 2015), a 50 percent reduction
in mining rates at the Tyrone mine (which produced 84 million
pounds of copper for the year 2015) and adjustments to mining
rates at other North America mines. The revised plans at each of
the operations incorporate the impacts of lower energy, acid and
other consumables, reduced labor costs and a significant
reduction in capital spending plans. These plans will continue to
be reviewed and additional adjustments may be made as market
conditions warrant.
Operating Data. Following is summary operating data for the
North America copper mines for the years ended December 31:
2015 2014 2013
Operating Data, Net of Joint Venture Interest
Copper
Production
(millions of recoverable pounds) 1,947 1,670 1,431
Sales, excluding purchases
(millions of recoverable pounds) 1,988 1,664 1,422
Average realized price per pound $ 2.47 $ 3.13 $ 3.36
Molybdenum
Production
(millions of recoverable pounds) a 37 33 32
100% Operating Data
SX/EW operations
Leach ore placed in stockpiles
(metric tons per day) 909,900 1,005,300 1,003,500
Average copper ore grade (percent) 0.26 0.25 0.22
Copper production
(millions of recoverable pounds) 1,134 963 889
Mill operations
Ore milled (metric tons per day) 312,100 273,800 246,500
Average ore grade (percent):
Copper 0.49 0.45 0.39
Molybdenum 0.03 0.03 0.03
Copper recovery rate (percent) 85.4 85.8 85.3
Copper production
(millions of recoverable pounds) 972 828 642
a. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes,
which includes sales of molybdenum produced at the North America copper mines.
2015 ANNUAL REPORT 37
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

2015 compared with 2014. Copper sales volumes from our North
America copper mines increased to 2.0 billion pounds in 2015,
compared with 1.66 billion pounds in 2014, primarily because of
higher mining and milling rates at Morenci and higher ore grades
at Morenci, Chino and Safford. Sales from the Morenci mine
represented 46 percent of total North America copper sales in
2015 and 41 percent in 2014.
Copper sales from North America are expected to approximate
1.8 billion pounds in 2016. Refer to “Outlook” for projected
molybdenum sales volumes.
2014 compared with 2013. Copper sales volumes from our
North America copper mines increased to 1.66 billion pounds in
2014, compared with 1.42 billion pounds in 2013, primarily
reflecting higher mining and milling rates at Morenci and higher
ore grades at Chino.
Unit Net Cash Costs. Unit net cash costs per pound of copper is a
measure intended to provide investors with information about the
cash-generating capacity of our mining operations expressed on
a basis relating to the primary metal product for our respective
operations. We use this measure for the same purpose and
for monitoring operating performance by our mining operations.
This information differs from measures of performance
determined in accordance with U.S. GAAP and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. This
measure is presented by other metals mining companies,
although our measure may not be comparable to similarly titled
measures reported by other companies.
Gross Profit per Pound of Copper and Molybdenum. The
following tables summarize unit net cash costs and gross profit
per pound at our North America copper mines for the years ended
December 31. Refer to “Product Revenues and Production Costs”
for an explanation of the “by-product” and “co-product” methods
and a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in our
consolidated financial statements.

2015 2014

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Molybdenuma Method Copper Molybdenuma

Revenues, excluding adjustments $ 2.47 $ 2.47 $ 7.02 $ 3.13 $ 3.13 $ 11.74

Site production and delivery, before net noncash
and other costs shown below 1.68 1.59 5.61 1.85 1.73 6.85
By-product credits (0.13) — — (0.24) — —
Treatment charges 0.12 0.12 — 0.12 0.12 —
Unit net cash costs 1.67 1.71 5.61 1.73 1.85 6.85
Depreciation, depletion and amortization 0.28 0.27 0.53 0.29 0.27 0.60
Copper and molybdenum inventory adjustments 0.07 0.07 0.07 — — —
Noncash and other costs, net 0.12b 0.11 0.16 0.09 0.09 0.07
Total unit costs 2.14 2.16 6.37 2.11 2.21 7.52
Revenue adjustments, primarily for pricing
on prior period open sales (0.01) (0.01) — — — —
Gross profit per pound $ 0.32 $ 0.30 $ 0.65 $ 1.02 $ 0.92 $ 4.22
Copper sales (millions of recoverable pounds) 1,985 1,985 1,657 1,657
Molybdenum sales (millions of recoverable pounds)a 37 33

a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b. Includes $0.05 per pound in 2015 for asset impairment, restructuring and other net charges.

Our North America copper mines have varying cost structures
because of differences in ore grades and characteristics,
processing costs, by-product credits and other factors. During
2015, average unit net cash costs (net of by-product credits) for
the North America copper mines ranged from $1.56 per pound
to $2.23 per pound at the individual mines and averaged $1.67 per
pound. Lower average unit net cash costs (net of by-product
credits) in 2015, compared with $1.73 per pound in 2014, reflect
favorable impacts from higher copper sales volumes, partly offset
by lower by-product credits.
Because certain assets are depreciated on a straight-line basis,
North America’s average unit depreciation rate may vary with
asset additions and the level of copper production and sales.
Assuming achievement of current volume and cost estimates
and an average price of $4.50 per pound of molybdenum for 2016,
average unit net cash costs (net of by-product credits) for
our North America copper mines are expected to approximate
$1.49 per pound of copper in 2016. North America’s average unit
net cash costs for 2016 would change by approximately $0.02
per pound for each $2 per pound change in the average price of
molybdenum during 2016.

38
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

2014 2013

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Molybdenuma Method Copper Molybdenuma

Revenues, excluding adjustments $ 3.13 $ 3.13 $ 11.74 $ 3.36 $ 3.36 $ 10.79

Site production and delivery, before net noncash
and other costs shown below 1.85 1.73 6.85 2.00 1.94 3.79
By-product credits (0.24) — — (0.24) — —
Treatment charges 0.12 0.12 — 0.11 0.11 —
Unit net cash costs 1.73 1.85 6.85 1.87 2.05 3.79
Depreciation, depletion and amortization 0.29 0.27 0.60 0.28 0.27 0.22
Noncash and other costs, net 0.09 0.09 0.07 0.14b 0.14 0.04
Total unit costs 2.11 2.21 7.52 2.29 2.46 4.05
Revenue adjustments, primarily for pricing
on prior period open sales — — — — — —
Gross profit per pound $ 1.02 $ 0.92 $ 4.22 $ 1.07 $ 0.90 $ 6.74
Copper sales (millions of recoverable pounds) 1,657 1,657 1,416 1,416
Molybdenum sales (millions of recoverable pounds)a 33 32
a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b. Includes $0.05 per pound associated with updated mine plans at Morenci that resulted in a loss in recoverable copper in leach stockpiles.

Unit net cash costs (net of by-product credits) for our North Operating Data. Following is summary operating data
America copper mines decreased to $1.73 per pound of copper in for our South America mining operations for the years ended
2014, compared with $1.87 per pound in 2013, primarily reflecting December 31.
higher copper sales volumes.
2015 2014 a 2013 a

South America Mining Copper

We operate two copper mines in South America — Cerro Verde in Production
(millions of recoverable pounds) 869 1,151 1,323
Peru (in which we own a 53.56 percent interest) and El Abra in
Sales
Chile (in which we own a 51 percent interest). These operations (millions of recoverable pounds) 871 1,135 1,325
are consolidated in our financial statements. Average realized price per pound $ 2.38 $ 3.08 $ 3.30
South America mining includes open-pit mining, sulfide ore Gold
concentrating, leaching and SX/EW operations. Production from Production
our South America mines is sold as copper concentrate or copper (thousands of recoverable ounces) — 72 101
cathode under long-term contracts. Our South America mines Sales
(thousands of recoverable ounces) — 67 102
also ship a portion of their copper concentrate and cathode
Average realized price per ounce — $ 1,271 $ 1,350
to Atlantic Copper. In addition to copper, the Cerro Verde mine
Molybdenum
produces molybdenum concentrate and silver. Production
As further discussed in Note 2, on November 3, 2014, we (millions of recoverable pounds) b 7 11 13
completed the sale of our 80 percent ownership interests in the SX/EW operations
Candelaria and Ojos del Salado mines. Leach ore placed in stockpiles
Operating and Development Activities. The Cerro Verde (metric tons per day) 193,900
275,200
274,600
expansion project commenced operations in September 2015 and Average copper ore grade (percent) 0.44 0.48 0.50
Copper production
is currently operating at full rates. Cerro Verde’s expanded
(millions of recoverable pounds) 430 491 448
operations will benefit from its large-scale, long-lived reserves
Mill operations
and cost efficiencies. The project included expanding the Ore milled (metric tons per day) 152,100
180,500
192,600
concentrator facilities from 120,000 metric tons of ore per day to Average ore grade:
360,000 metric tons of ore per day and is expected to provide Copper (percent) 0.46 0.54 0.65
incremental annual production of approximately 600 million Gold (grams per metric ton) — 0.10 0.12
Molybdenum (percent) 0.02 0.02 0.02
pounds of copper and 15 million pounds of molybdenum.
Copper recovery rate (percent) 81.5 88.1 90.9
Our revised operating plans for our South America mines Copper production
principally reflect adjustments to our mine plan at El Abra (which (millions of recoverable pounds) 439 660 875
produced 324 million pounds of copper for the year 2015) to
a. Includes the results of the Candelaria and Ojos del Salado mines, prior to their sale
reduce mining and stacking rates by approximately 50 percent to in November 2014, which had sales volumes totaling 268 million pounds of copper and
achieve lower operating and labor costs, defer capital expenditures 67 thousand ounces of gold in 2014 and 424 million pounds of copper and 102 thousand
and extend the life of the existing operations. ounces of gold in 2013.
b. Refer to “Consolidated Results” for our consolidated molybdenum sales volumes,
which includes sales of molybdenum produced at Cerro Verde.

2015 ANNUAL REPORT 39

 MANAGEMENT’S DISCUSSION
AND ANALYSIS

2015 compared with 2014. Lower consolidated copper sales
volumes from South America of 871 million pounds in 2015,
compared with 1.14 billion in 2014, primarily reflect the
November 2014 sale of the Candelaria and Ojos del Salado mines
and lower ore grades at El Abra, partly offset by higher mining
and milling rates at Cerro Verde.
For the year 2016, consolidated sales volumes from South
America mines are expected to approximate 1.3 billion pounds of
copper. Refer to “Outlook” for projected molybdenum sales
volumes. As discussed in “Risk Factors” contained in Part I, Item 1A.
of our annual report on Form 10-K for the year ended December 31,
2015, in January 2016, the Peruvian government declared a
temporary state of emergency with respect to the water supply in
the Rio Chili Basin because of drought conditions, which could
have a negative impact on production at Cerro Verde.
2014 compared with 2013. Copper sales volumes from our
South America mining operations totaled 1.14 billion pounds in
2014, compared with 1.33 billion pounds in 2013, primarily reflecting
lower ore grades at Candelaria and Cerro Verde, and the sale of the
Candelaria and Ojos del Salado mines in November 2014.
Unit Net Cash Costs. Unit net cash costs per pound of copper
is a measure intended to provide investors with information about
the cash-generating capacity of our mining operations expressed
on a basis relating to the primary metal product for our respective
operations. We use this measure for the same purpose and
for monitoring operating performance by our mining operations.
This information differs from measures of performance
determined in accordance with U.S. GAAP and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. This
measure is presented by other metals mining companies,
although our measure may not be comparable to similarly titled
measures reported by other companies.
Gross Profit per Pound of Copper. The following tables summarize
unit net cash costs and gross profit per pound at our South
America mining operations for the years ended December 31. Unit
net cash costs per pound of copper are reflected under the
by-product and co-product methods as the South America mining
operations also had small amounts of molybdenum, gold and
silver sales. Refer to “Product Revenues and Production Costs”
for an explanation of the “by-product” and “co-product” methods
and a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in our
consolidated financial statements.

2015 2014
By-Product
Co-Product By-Product Co-Product
Method Method Method Method

Revenues, excluding adjustments $ 2.38 $ 2.38 $ 3.08 $ 3.08

Site production and delivery, before net noncash
and other costs shown below 1.60 1.56 1.62 1.51
By-product credits (0.05) — (0.22) —
Treatment charges 0.19 0.19 0.17 0.17
Royalty on metals — — 0.01 —
Unit net cash costs 1.74 1.75 1.58a 1.68
Depreciation, depletion and amortization 0.40 0.39 0.32 0.31
Copper inventory adjustments 0.08 0.08 — —
Noncash and other costs, net 0.05 0.05 0.06 0.06
Total unit costs 2.27 2.27 1.96 2.05
Revenue adjustments, primarily for pricing
on prior period open sales (0.03) (0.03) (0.05) (0.05)
Gross profit per pound $ 0.08 $ 0.08 $ 1.07 $ 0.98
Copper sales (millions of recoverable pounds) 871 871 1,135 1,135
a. Excluding the results of the Candelaria and Ojos del Salado mines, South America mining’s unit net cash costs averaged $1.57 per pound in 2014.

40
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

During 2015, unit net cash costs (net of by-product credits) for the
South America mines ranged from $1.64 per pound for the Cerro
Verde mine to $1.91 per pound for the El Abra mine and averaged
$1.74 per pound. Higher average unit net cash costs (net of
by-product credits) for our South America mining operations in
2015, compared with $1.58 per pound in 2014, primarily reflect
lower by-product credits.
Because certain assets are depreciated on a straight-line basis,
South America’s unit depreciation rate may vary with asset
additions and the level of copper production and sales. The unit
depreciation rate increased in 2015, compared with 2014,
primarily because of the Cerro Verde expansion assets being
placed in service in 2015.
Revenue adjustments primarily result from changes in prices
on provisionally priced copper sales recognized in prior periods.
Refer to “Consolidated Results — Revenues” for further
discussion of adjustments to prior period provisionally priced
copper sales.
Assuming achievement of current volume and cost estimates
and average prices of $4.50 per pound of molybdenum in 2016,
we estimate that average unit net cash costs (net of by-product
credits) for our South America mining operations would
approximate $1.50 per pound of copper in 2016.

2014 2013
By-Product
Co-Product By-Product
Co-Product
Method Method Method Method

Revenues, excluding adjustments $ 3.08 $ 3.08 $ 3.30 $ 3.30

Site production and delivery, before net noncash
and other costs shown below 1.62 1.51 1.53a 1.42
By-product credits (0.22) — (0.27) —
Treatment charges 0.17 0.17 0.17 0.17
Royalty on metals 0.01 — — —
Unit net cash costs 1.58b 1.68 1.43b 1.59
Depreciation, depletion and amortization 0.32 0.31 0.26 0.24
Noncash and other costs, net 0.06 0.06 0.04 0.03
Total unit costs 1.96 2.05 1.73 1.86
Revenue adjustments, primarily for pricing
on prior period open sales (0.05) (0.05) (0.03) (0.03)
Gross profit per pound $ 1.07 $ 0.98 $ 1.54 $ 1.41
Copper sales (millions of recoverable pounds) 1,135 1,135 1,325 1,325
a. Includes labor agreement costs at Cerro Verde totaling $0.03 per pound.
b. Excluding the results of Candelaria and Ojos del Salado mines, South America mining’s unit net cash costs averaged $1.57 per pound in 2014 and $1.48 per pound in 2013.

Unit net cash costs (net of by-product credits) for our South
America mining operations increased to $1.58 per pound of
copper in 2014, compared with $1.43 per pound in 2013, primarily
reflecting lower sales volumes and by-product credits.
Indonesia Mining
Indonesia mining includes PT-FI’s Grasberg minerals district, one
of the world’s largest copper and gold deposits, in Papua,
Indonesia. We own 90.64 percent of PT-FI, including 9.36 percent
owned through our wholly owned subsidiary, PT Indocopper
Investama.
PT-FI proportionately consolidates an unincorporated joint
venture with Rio Tinto plc (Rio Tinto), under which Rio Tinto has a
40 percent interest in certain assets and a 40 percent interest
through 2021 in production exceeding specified annual amounts
of copper, gold and silver. After 2021, all production and related
revenues and costs are shared 60 percent PT-FI and 40 percent
Rio Tinto. Refer to Note 3 for further discussion of our joint
venture with Rio Tinto. Under the joint venture arrangements,
PT-FI was allocated nearly 100 percent of copper, gold and
silver production and sales for each of the three years ended
December 31, 2015. At December 31, 2015, the amounts allocated
100 percent to PT-FI remaining to be produced totaled 6.4 billion
pounds of copper, 9.7 million ounces of gold and 19.5 million
ounces of silver. Based on the current mine plans, PT-FI anticipates
that it will be allocated most of the production and related
revenues and costs through 2021.
PT-FI produces copper concentrate that contains significant
quantities of gold and silver. Substantially all of PT-FI’s copper
concentrate is sold under long-term contracts, and in 2015,
approximately 37 percent of PT-FI’s copper concentrate was sold
to PT Smelting, its 25-percent-owned smelter and refinery in
Gresik, Indonesia.
Regulatory Matters. In January 2014, the Indonesian government
published regulations that among other things imposed a
progressive export duty on copper concentrate and restricts
concentrate exports after January 12, 2017. Despite PT-FI’s rights
under its Contract of Work (COW) to export concentrate without
the payment of duties, PT-FI was unable to obtain administrative
approval for exports and operated at approximately half of its
capacity from mid-January 2014 through July 2014.

2015 ANNUAL REPORT 41

 MANAGEMENT’S DISCUSSION
AND ANALYSIS
In July 2014, PT-FI entered into a Memorandum of Understanding
(MOU) with the Indonesian government. Under the MOU, PT-FI
provided a $115 million assurance bond to support its commitment
for smelter development, agreed to increase royalty rates and
agreed to pay export duties (7.5 percent, declining to 5.0 percent
when smelter development progress exceeds 7.5 percent and
none when development progress exceeds 30 percent). The MOU
also anticipated an amendment of the COW within six months to
address other matters; however, no terms of the COW other than
those relating to the smelter bond, increased royalties and export
duties were changed. In January 2015, the MOU was extended to
July 25, 2015, and it expired on that date. The increased royalty
rates, export duties and smelter assurance bond remain in effect.
PT-FI is required to apply for renewal of export permits at
six-month intervals. On July 29, 2015, PT-FI’s export permit was
renewed through January 28, 2016. In connection with the
renewal, export duties were reduced to 5.0 percent, as a result of
smelter development progress. On February 9, 2016, PT-FI’s
export permit was renewed through August 8, 2016. PT-FI will
continue to pay a 5.0 percent export duty on concentrate while it
reviews its smelter progress with the Indonesian government.
PT-FI continues to engage in discussions with the Indonesian
government regarding its COW and long-term operating rights.
In October 2015, the Indonesian government provided a letter
of assurance to PT-FI indicating that it will approve the extension
of operations beyond 2021, and provide the same rights and
the same level of legal and fiscal certainty provided under its
current COW.
In connection with its COW negotiations and subject to concluding
the agreement to extend PT-FI’s operations beyond 2021 on
acceptable terms, PT-FI has agreed to construct new smelter capacity
in Indonesia and to divest an additional 20.64 percent interest in
PT-FI at fair market value. PT-FI continues to advance plans for the
smelter in parallel with completing its COW negotiations. Refer
to Note 13 for further discussion.
We cannot predict whether PT-FI will be successful in reaching
a satisfactory agreement on the terms of its long-term mining
rights. If PT-FI is unable to reach agreement with the Indonesian
government on its long-term rights, we may be required to reduce
or defer investments in underground development projects,
which could have a material adverse effect on PT-FI’s future
production and reserves. In addition, PT-FI would intend to pursue
any and all claims against the Indonesian government for breach
of contract through international arbitration.
Refer to “Risk Factors” contained in Part I, Item 1A. of our annual
report on Form 10-K for the year ended December 31, 2015, for
discussion of risks associated with our operations in Indonesia.
Operating and Development Activities. During 2015, PT-FI
revised its plans to incorporate improved operational efficiencies,
reductions in input costs, supplies and contractor costs,
foreign exchange impacts and a deferral of 15 percent of capital
expenditures that had been planned for 2016.
42
PT-FI has several projects in progress in the Grasberg minerals
district related to the development of its large-scale, long-lived,
high-grade underground ore bodies. In aggregate, these
underground ore bodies are expected to produce large-scale
quantities of copper and gold following the transition from the
Grasberg open pit, currently anticipated to occur in late 2017.
Development of the Grasberg Block Cave and Deep Mill Level
Zone (DMLZ) underground mines is advancing. Production from
the DMLZ mine commenced during September 2015, and the
Grasberg Block Cave mine is anticipated to commence production
in 2018.
From 2016 to 2020, estimated aggregate capital spending on
these projects is currently expected to average $1.0 billion per
year ($0.8 billion per year net to PT-FI). Considering the long-term
nature and size of these projects, actual costs could vary from
these estimates. In response to recent market conditions and the
uncertain global economic environment, the timing of these
expenditures continues to be reviewed.
The following provides additional information on the continued
development of the Common Infrastructure project, the Grasberg
Block Cave underground mine and the DMLZ ore body that lies
below the Deep Ore Zone (DOZ) underground mine.
Common Infrastructure and Grasberg Block Cave Mine. In 2004,
PT-FI commenced its Common Infrastructure project to provide
access to its large undeveloped underground ore bodies located
in the Grasberg minerals district through a tunnel system located
approximately 400 meters deeper than its existing underground
tunnel system. In addition to providing access to our underground
ore bodies, the tunnel system will enable PT-FI to conduct future
exploration in prospective areas associated with currently
identified ore bodies. The tunnel system was completed to the
Big Gossan terminal, and the Big Gossan mine was brought into
production in 2010. Production from the Big Gossan mine, which
is currently suspended, is expected to restart in the first half of
2017 and ramp up to 7,000 metric tons of ore per day in 2019.
Development of the DMLZ and Grasberg Block Cave underground
mines is advancing using the Common Infrastructure project
tunnels as access.
The Grasberg Block Cave underground mine accounts for more
than 45 percent of our recoverable proven and probable reserves
in Indonesia. Production from the Grasberg Block Cave mine is
expected to commence in 2018, following the end of mining of the
Grasberg open pit. Targeted production rates once the Grasberg
Block Cave mining operation reaches full capacity are expected to
approximate 160,000 metric tons of ore per day. As a result of
current market conditions, PT-FI is reviewing its operating plans
to determine the optimum mine plan for the Grasberg Block Cave.
Aggregate mine development capital for the Grasberg Block
Cave mine and associated Common Infrastructure is expected to
approximate $6.0 billion (incurred between 2008 to 2022), with
PT-FI’s share totaling approximately $5.5 billion. Aggregate
project costs totaling $2.2 billion have been incurred through
December 31, 2015 ($0.5 billion during 2015).

DMLZ. The DMLZ ore body lies below the DOZ underground
mine at the 2,590-meter elevation and represents the downward
continuation of mineralization in the Ertsberg East Skarn system
and neighboring Ertsberg porphyry. The ore body is mined using
a block-cave method. Production from the DMLZ underground
mine commenced in September 2015. Ore milled from the DMLZ
underground mine averaged 2,900 metric tons of ore per day in
2015 (3,500 metric tons of ore per day in fourth-quarter 2015).
Targeted production rates once the DMLZ underground mine
reaches full capacity are expected to approximate 80,000 metric
tons of ore per day in 2021.
Drilling efforts continue to determine the extent of the DMLZ
ore body. Aggregate mine development capital costs for the
DMLZ underground mine are expected to approximate $2.6 billion
(incurred between 2009 and 2020), with PT-FI’s share totaling
approximately $1.6 billion. Aggregate project costs totaling
$1.5 billion have been incurred through December 31, 2015
($0.3 billion during 2015).
Operating Data. Following is summary operating data for our
Indonesia mining operations for the years ended December 31.
2015 2014 2013
Operating Data, Net of Joint Venture Interest
Copper
Production
(millions of recoverable pounds) 752 636 915
Sales (millions of recoverable pounds) 744 664 885
Average realized price per pound $ 2.33 $ 3.01 $ 3.28
Gold
Production
(thousands of recoverable ounces) 1,232 1,130 1,142
Sales
(thousands of recoverable ounces) 1,224 1,168 1,096
Average realized price per ounce $ 1,129 $ 1,229 $ 1,312
100% Operating Data
Ore milled (metric tons per day): a
Grasberg open pit 115,900 69,100 127,700
DOZ underground mineb 43,700 50,500 49,400
DMLZ underground minec 2,900 — —
Big Gossan underground mined — 900 2,100
Total
162,500 120,500
179,200
Average ore grade:
Copper (percent) 0.67 0.79 0.76
Gold (grams per metric ton) 0.79 0.99 0.69
Recovery rates (percent):
Copper 90.4 90.3 90.0
Gold 83.4 83.2 80.0
Production (recoverable):
Copper (millions of pounds) 752 651 928
Gold (thousands of ounces) 1,232 1,132 1,142
a. Amounts represent the approximate average daily throughput processed at PT-FI’s
mill facilities from each producing mine.
b. Ore milled from the DOZ underground mine is expected to ramp up to over 60,000
metric tons of ore per day in 2017.
c. Production from the DMLZ underground mine commenced in September 2015.
d. Production from the Big Gossan underground mine is expected to restart in the first
half of 2017 and ramp up to 7,000 metric tons of ore per day in 2019.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
2015 compared with 2014. Sales volumes from our Indonesia
mining operations increased to 744 million pounds of copper and
1.2 million ounces of gold in 2015, compared with 664 million
pounds of copper and 1.2 million ounces of gold in 2014, primarily
reflecting higher mill rates because of the 2014 export restrictions,
partly offset by lower ore grades.
At the Grasberg mine, the sequencing of mining areas with
varying ore grades causes fluctuations in quarterly and annual
production of copper and gold. PT-FI expects ore grades to
improve significantly beginning in the second half of 2016 with
access to higher grade sections of the Grasberg open pit,
resulting in higher production and lower unit net cash costs.
Consolidated sales volumes from our Indonesia mining
operations are expected to approximate 1.5 billion pounds of
copper and 1.8 million ounces of gold for 2016, with approximately
65 percent of copper sales and 75 percent of gold sales anticipated
in the second half of the year. Damages to semi-autogenous
grinding (SAG) mill electrical components in January 2016 will
require repairs in the first half of 2016 or as late as 2017, which are
expected to have a negative impact on production at PT-FI.
2014 compared with 2013. Sales volumes from our Indonesia
mining operations totaled 664 million pounds of copper and
1.2 million ounces of gold in 2014, compared with 885 million
pounds of copper and 1.1 million ounces of gold in 2013, reflecting
lower mill throughput resulting from the export restrictions and
labor-related work stoppages in 2014, partly offset by higher gold
ore grades.
Unit Net Cash Costs. Unit net cash costs per pound of copper is
a measure intended to provide investors with information about
the cash-generating capacity of our mining operations expressed
on a basis relating to the primary metal product for our respective
operations. We use this measure for the same purpose and
for monitoring operating performance by our mining operations.
This information differs from measures of performance determined
in accordance with U.S. GAAP and should not be considered in
isolation or as a substitute for measures of performance determined
in accordance with U.S. GAAP. This measure is presented by
other metal mining companies, although our measure may
not be comparable to similarly titled measures reported by
other companies.
Gross Profit per Pound of Copper and per Ounce of Gold. The
following tables summarize the unit net cash costs and gross
profit per pound of copper and per ounce of gold at our
Indonesia mining operations for the years ended December 31.
Refer to “Production Revenues and Production Costs” for an
explanation of “by-product” and “co-product” methods and a
reconciliation of unit net cash costs per pound to production and
delivery costs applicable to sales reported in our consolidated
financial statements.
43
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

2015 2014

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Gold Method Copper Gold

Revenues, excluding adjustments $ 2.33 $ 2.33 $ 1,129 $ 3.01 $ 3.01 $ 1,229

Site production and delivery, before net noncash
and other costs shown below 2.39 1.32 638 2.76a 1.59 648
Gold and silver credits (1.91) — — (2.25) — —
Treatment charges 0.31 0.17 83 0.26 0.15 61
Export duties 0.15 0.08 39 0.12 0.06 27
Royalty on metals 0.15 0.09 41 0.17 0.10 41
Unit net cash costs 1.09 1.66 801 1.06 1.90 777
Depreciation and amortization 0.39 0.22 105 0.40 0.23 94
Noncash and other costs, net 0.05 0.03 14 0.29a 0.17 68
Total unit costs 1.53 1.91 920 1.75 2.30 939
Revenue adjustments, primarily for pricing
on prior period open sales (0.07) (0.06) 7 (0.08) (0.08) 15
PT Smelting intercompany profit 0.01 0.01 4 0.05 0.03 12
Gross profit per pound/ounce $ 0.74 $ 0.37 $ 220 $ 1.23 $ 0.66 $ 317
Copper sales (millions of recoverable pounds) 744 744 664 664
Gold sales (thousands of recoverable ounces) 1,224 1,168
a. Fixed costs totaling $0.22 per pound of copper charged directly to cost of sales as a result of the impact of export restrictions on PT-FI’s operating rates are excluded from site
production and delivery and included in net noncash and other costs in 2014.

A significant portion of PT-FI’s costs are fixed and unit costs vary
depending on volumes and other factors. Indonesia’s unit net
cash costs (including gold and silver credits) of $1.09 per pound of
copper in 2015 were higher than unit net cash costs of $1.06 per
pound in 2014, primarily reflecting lower gold and silver credits,
partly offset by lower site production and delivery mostly
associated with lower diesel costs and foreign exchange impacts.
PT-FI’s royalties totaled $114 million in 2015, $115 million in
2014 and $109 million in 2013, and export duties totaled $109 million
in 2015 and $77 million in 2014. Refer to Note 13 for further
discussion of PT-FI’s royalties.
Because certain assets are depreciated on a straight-line basis,
PT-FI’s unit depreciation rate varies with the level of copper
production and sales.
Revenue adjustments primarily result from changes in prices
on provisionally priced copper sales recognized in prior periods.
Refer to “Consolidated Results — Revenues” for further discussion
of adjustments to prior period provisionally priced copper sales.
PT Smelting intercompany profit represents the change in the
deferral of 25 percent of PT-FI’s profit on sales to PT Smelting.
Refer to “Operations — Smelting & Refining” for further discussion.
Assuming achievement of current volume and cost estimates,
and an average gold price of $1,100 per ounce for 2016, Indonesia’s
unit net cash costs (net of gold and silver credits) are expected
to approximate $0.17 per pound of copper for the year 2016.
Indonesia’s projected unit net cash costs would change by
approximately $0.06 per pound for each $50 per ounce change in
the average price of gold during 2016. Because of the fixed nature
of a large portion of Indonesia’s costs, unit costs vary from
quarter to quarter depending on copper and gold volumes. Higher
anticipated ore grades from Grasberg in the second half of 2016
are expected to result in lower unit net cash costs in the second
half of 2016.

44
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

2014 2013

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Gold Method Copper Gold

Revenues, excluding adjustments $ 3.01 $ 3.01 $ 1,229 $ 3.28 $ 3.28 $ 1,312

Site production and delivery, before net noncash
and other costs shown below 2.76a 1.59 648 2.46 1.62 648
Gold and silver credits (2.25) — — (1.69) — —
Treatment charges 0.26 0.15 61 0.23 0.15 61
Export duties 0.12 0.06 27 — — —
Royalty on metals 0.17 0.10 41 0.12 0.08 33
Unit net cash costs 1.06 1.90 777 1.12 1.85 742
Depreciation and amortization 0.40 0.23 94 0.28 0.19 73
Noncash and other costs, net 0.29a 0.17 68 0.13 0.09 35
Total unit costs 1.75 2.30 939 1.53 2.13 850
Revenue adjustments, primarily for pricing
on prior period open sales (0.08) (0.08) 15 — — (1)
PT Smelting intercompany profit (loss) 0.05 0.03 12 (0.02) (0.01) (6)
Gross profit per pound/ounce $ 1.23 $ 0.66 $ 317 $ 1.73 $ 1.14 $ 455
Copper sales (millions of recoverable pounds) 664 664 885 885
Gold sales (thousands of recoverable ounces) 1,168 1,096
a. Fixed costs totaling $0.22 per pound of copper charged directly to cost of sales as a result of the impact of export restrictions on PT-FI’s operating rates are excluded from site
production and delivery and included in net noncash and other costs in 2014.

Unit net cash costs (net of gold and silver credits) for our Indonesia
mining operations of $1.06 per pound of copper in 2014 were lower
than unit net cash costs of $1.12 per pound in 2013, primarily
reflecting lower copper sales volumes, the impact of export duties
and increased royalty rates, which were more than offset by higher
gold and silver credits as a result of lower copper sales volumes.
Africa Mining
Africa mining includes Tenke Fungurume Mining S.A.’s (TFM)
Tenke minerals district. We hold an effective 56 percent interest in
the Tenke copper and cobalt mining concessions in the Southeast
region of the DRC through our consolidated subsidiary TFM, and
we are the operator of Tenke.
The Tenke operation includes open-pit mining, leaching and
SX/EW operations. Copper production from the Tenke minerals
district is sold as copper cathode. In addition to copper, the Tenke
minerals district produces cobalt hydroxide.
Operating and Development Activities. TFM completed its second
phase expansion project in early 2013, which included increasing
mine, mill and processing capacity. Construction of a second
sulphuric acid plant is substantially complete. We continue to
engage in exploration activities and metallurgical testing to
evaluate the potential of the highly prospective minerals district
at Tenke. Future development and expansion opportunities are
being deferred pending improved market conditions.
Our revised plans at Tenke incorporate a 50 percent reduction
in capital spending that had been planned for 2016 and
various initiatives to reduce operating, administrative and
exploration costs.
Operating Data. Following is summary operating data for our
Africa mining operations for the years ended December 31.
2015 2014 2013
Copper
Production
(millions of recoverable pounds) 449 447 462
Sales (millions of recoverable pounds) 467 425 454
Average realized price per pounda $ 2.42 $ 3.06 $ 3.21
Cobalt
Production
(millions of contained pounds) 35 29 28
Sales (millions of contained pounds) 35 30 25
Average realized price per pound $ 8.21 $ 9.66 $ 8.02
Ore milled (metric tons per day) 14,900 14,700 14,900
Average ore grade (percent):
Copper 4.00 4.06 4.22
Cobalt 0.43 0.34 0.37
Copper recovery rate (percent) 94.0 92.6 91.4
a. Includes point-of-sale transportation costs as negotiated in customer contracts.
2015 compared with 2014. Copper sales volumes from TFM
increased to 467 million pounds of copper and 35 million pounds
of cobalt in 2015, compared with 425 million pounds of copper
and 30 million pounds of cobalt in 2014. Higher copper sales
volumes primarily reflect timing of shipments, and higher cobalt
sales volumes primarily reflect higher ore grades.
Consolidated sales volumes from TFM are expected to
approximate 495 million pounds of copper and 35 million pounds
of cobalt in 2016. Higher projected copper sales volumes from
TFM in 2016 primarily reflect higher projected ore grades.
2014 compared with 2013. Copper sales volumes from TFM
decreased to 425 million pounds of copper in 2014, compared with
454 million pounds of copper in 2013, primarily because of lower
ore grades.

2015 ANNUAL REPORT 45

 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Unit Net Cash Costs. Unit net cash costs per pound of copper
is a measure intended to provide investors with information about
the cash-generating capacity of our mining operations
expressed on a basis relating to the primary metal product for
our respective operations. We use this measure for the same
purpose and for monitoring operating performance by our mining
operations. This information differs from measures of
performance determined in accordance with U.S. GAAP and
should not be considered in isolation or as a substitute for
measures of performance determined in accordance with U.S.
GAAP. This measure is presented by other metals mining
companies, although our measure may not be comparable to
similarly titled measures reported by other companies.
Gross Profit per Pound of Copper and Cobalt. The following tables
summarize the unit net cash costs and gross profit per pound of
copper and cobalt at our Africa mining operations for the years
ended December 31. Refer to “Production Revenues and Production
Costs” for an explanation of “by-product” and “co-product”
methods and a reconciliation of unit net cash costs per pound to
production and delivery costs applicable to sales reported in our
consolidated financial statements.

2015 2014

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Cobalt Method Copper Cobalt

Revenues, excluding adjustmentsa $ 2.42 $ 2.42 $ 8.21 $ 3.06 $ 3.06 $ 9.66

Site production and delivery, before net noncash
and other costs shown below 1.58 1.37 5.40 1.56 1.39 5.30
Cobalt creditsb (0.42) — — (0.48) — —
Royalty on metals 0.05 0.04 0.14 0.07 0.06 0.16
Unit net cash costs 1.21 1.41 5.54 1.15 1.45 5.46
Depreciation, depletion and amortization 0.55 0.46 1.26 0.54 0.46 1.13
Noncash and other costs, net 0.07 0.06 0.16 0.05 0.04 0.11
Total unit costs 1.83 1.93 6.96 1.74 1.95 6.70
Revenue adjustments, primarily for pricing
on prior period open sales (0.01) (0.01) (0.02) — — 0.07
Gross profit per pound $ 0.58 $ 0.48 $ 1.23 $ 1.32 $ 1.11 $ 3.03
Copper sales (millions of recoverable pounds) 467 467 425 425
Cobalt sales (millions of contained pounds) 35 30
a. Includes point-of-sale transportation costs as negotiated in customer contracts.
b. Net of cobalt downstream processing and freight costs.

Higher unit net cash costs (net of cobalt credits) for our Africa are expected to approximate $1.32 per pound of copper in 2016.
mining operations of $1.21 per pound of copper in 2015, Africa’s projected unit net cash costs for 2016 would change by
compared with $1.15 per pound of copper in 2014, primarily reflect $0.09 per pound for each $2 per pound change in the average
lower cobalt credits. Assuming achievement of current volume price of cobalt during 2016.
and cost estimates, and an average cobalt market price of $10 per
pound for 2016, average unit net cash costs (net of cobalt credits)
2014 2013

By-Product Co-Product Method By-Product Co-Product Method

Method Copper Cobalt Method Copper Cobalt

Revenues, excluding adjustmentsa $ 3.06 $ 3.06 $ 9.66 $ 3.21 $ 3.21 $ 8.02

Site production and delivery, before net noncash
and other costs shown below 1.56 1.39 5.30 1.43 1.35 4.35
Cobalt creditsb (0.48) — — (0.29) — —
Royalty on metals 0.07 0.06 0.16 0.07 0.06 0.14
Unit net cash costs 1.15 1.45 5.46 1.21 1.41 4.49
Depreciation, depletion and amortization 0.54 0.46 1.13 0.54 0.48 1.00
Noncash and other costs, net 0.05 0.04 0.11 0.06 0.06 0.11
Total unit costs 1.74 1.95 6.70 1.81 1.95 5.60
Revenue adjustments, primarily for pricing
on prior period open sales — — 0.07 — — 0.09
Gross profit per pound $ 1.32 $ 1.11 $ 3.03 $ 1.40 $ 1.26 $ 2.51
Copper sales (millions of recoverable pounds) 425 425 454 454
Cobalt sales (millions of contained pounds) 30 25
a. Includes point-of-sale transportation costs as negotiated in customer contracts.
b. Net of cobalt downstream processing and freight costs.

46

Unit net cash costs (net of cobalt credits) for our Africa mining
operations of $1.15 per pound of copper in 2014 were lower than
unit net cash costs of $1.21 per pound of copper in 2013, primarily
reflecting higher cobalt credits, partly offset by higher site
production and delivery costs associated with input and mine
logistics support costs.
Molybdenum Mines
We have two wholly owned molybdenum mines in North America —
the Henderson underground mine and the Climax open-pit mine,
both in Colorado. The Henderson and Climax mines produce
high-purity, chemical-grade molybdenum concentrate, which is
typically further processed into value-added molybdenum
chemical products. The majority of molybdenum concentrate
produced at the Henderson and Climax mines, as well as from our
North and South America copper mines, is processed at our own
conversion facilities.
Operating and Development Activities. The revised plans for our
Henderson molybdenum mine incorporate lower operating rates,
resulting in an approximate 65 percent reduction in Henderson’s
projected annual production volumes. We have also adjusted
production plans at our by-product mines, including the impacts
of a planned shutdown at our Sierrita mine. Additionally, we
have incorporated changes in the commercial pricing structure
for our chemical products to promote continuation of chemical-
grade production.
Production from our molybdenum mines totaled 48 million
pounds of molybdenum in 2015, 51 million pounds in 2014 and
49 million pounds in 2013. Refer to “Consolidated Results” for
our consolidated molybdenum operating data, which includes
sales of molybdenum produced at our molybdenum mines and at
our North and South America copper mines, and refer to
“Outlook” for projected consolidated molybdenum sales volumes.
Unit Net Cash Costs per Pound of Molybdenum. Unit net cash
costs per pound of molybdenum is a measure intended to provide
investors with information about the cash-generating capacity of
our mining operations expressed on a basis relating to the primary
metal product for our respective operations. We use this measure
for the same purpose and for monitoring operating performance
by our mining operations. This information differs from measures
of performance determined in accordance with U.S. GAAP and
should not be considered in isolation or as a substitute for measures
of performance determined in accordance with U.S. GAAP. This
measure is presented by other metals mining companies, although
our measure may not be comparable to similarly titled measures
reported by other companies.
Average unit net cash costs for our molybdenum mines totaled
$7.11 per pound of molybdenum in 2015, $7.08 per pound in 2014
and $7.15 per pound in 2013. Assuming achievement of current
volume and cost estimates, we estimate unit net cash costs for the
molybdenum mines to average $8.25 per pound of molybdenum
in 2016, primarily reflecting lower projected molybdenum
MANAGEMENT’S DISCUSSION
AND ANALYSIS
production. Refer to “Product Revenues and Production Costs” for
a reconciliation of unit net cash costs per pound to production
and delivery costs applicable to sales reported in our consolidated
financial statements.
Smelting & Refining
We wholly own and operate a smelter in Arizona (Miami Smelter)
and a smelter and refinery in Spain (Atlantic Copper). Additionally,
PT-FI owns 25 percent of a smelter and refinery in Gresik,
Indonesia (PT Smelting). Treatment charges for smelting and
refining copper concentrate consist of a base rate per pound of
copper and per ounce of gold and are generally fixed. Treatment
charges represent a cost to our mining operations and income to
Atlantic Copper and PT Smelting. Thus, higher treatment charges
benefit our smelter operations and adversely affect our mining
operations. Our North America copper mines are less significantly
affected by changes in treatment charges because these operations
are largely integrated with our Miami smelter. Through this form
of downstream integration, we are assured placement of a
significant portion of our concentrate production. During 2015,
approximately 40 percent of our consolidated concentrate
production was processed through the Miami smelter, Atlantic
Copper and PT Smelting’s facilities.
Atlantic Copper smelts and refines copper concentrate and
markets refined copper and precious metals in slimes. Following
is a summary of Atlantic Copper’s concentrate purchases from
our copper mining operations and third parties for the years
ended December 31.
2015 2014 2013
North America copper mines 23% 21% 13%
South America mining 3 a 21 32
Indonesia mining 3 8 16
Third parties 71 50 39
100% 100% 100%
a. The decrease in purchases from the South America mines, compared to the years
2014 and 2013, primarily reflects the impact of the November 2014 sale of the
Candelaria and Ojos del Salado mines.
PT-FI’s contract with PT Smelting requires PT-FI to supply
100 percent of the copper concentrate requirements (at market
rates subject to a minimum or maximum rate) necessary for
PT Smelting to produce 205,000 metric tons of copper annually on
a priority basis. PT-FI may also sell copper concentrate to
PT Smelting at market rates for quantities in excess of 205,000
metric tons of copper annually. PT-FI supplied approximately
80 percent of PT Smelting’s concentrate requirements in each of the
three years ended December 31, 2015, and PT Smelting processed
37 percent in 2015, 58 percent in 2014 and 41 percent in 2013 of
PT-FI’s concentrate production. PT-Smelting resumed operations in
September 2015, following a temporary suspension in July 2015,
and operated at approximately 80 percent capacity until
November 2015, when required repairs of an acid plant cooling
tower that was damaged during the suspension were completed.
2015 ANNUAL REPORT 47
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
We defer recognizing profits on sales from our mining operations
to Atlantic Copper and on 25 percent of Indonesia mining’s sales to
PT Smelting until final sales to third parties occur. Changes in
these deferrals attributable to variability in intercompany volumes
resulted in net additions (reductions) to net income attributable
to common stockholders totaling $42 million ($0.04 per share) in
2015, $43 million ($0.04 per share) in 2014 and $(17) million
($(0.02) per share) in 2013. Our net deferred profits on inventories
at Atlantic Copper and PT Smelting to be recognized in future
periods’ net income attributable to common stockholders totaled
$14 million at December 31, 2015. Quarterly variations in ore
grades, the timing of intercompany shipments and changes in
product prices will result in variability in our net deferred profits
and quarterly earnings.
Oil and Gas Operations
Through our wholly owned oil and gas subsidiary, FM O&G,
our portfolio of oil and gas assets includes significant oil
production facilities and growth potential in the Deepwater GOM,
established oil production onshore and offshore California,
large onshore natural gas resources in the Haynesville shale in
Louisiana, natural gas production from the Madden area in central
Wyoming, and a position in the Inboard Lower Tertiary/Cretaceous
natural gas trend onshore in South Louisiana. For the year 2015,
88 percent of our oil and gas revenues, excluding the impact of
derivative contracts, were from oil and NGLs.
Impairment of Oil and Gas Properties. Under the SEC’s full cost
accounting rules, a “ceiling test” is conducted each quarter to
review the carrying value of the oil and gas properties for
impairment. Each quarter end since September 30, 2014, net
capitalized costs with respect to FM O&G’s proved U.S. oil and
gas properties exceeded the ceiling test limitation specified by full
cost accounting rules, which resulted in the recognition of
impairment charges totaling $13.0 billion in 2015 and $3.7 billion
in 2014. Refer to “Critical Accounting Estimates” for further
discussion of impairment of oil and gas properties.
In 2015, FM O&G also recognized impairment charges of
$164 million for international oil and gas properties, primarily
related to unsuccessful exploration activities in Morocco. Costs
associated with the exploration blocks offshore Morocco were
transferred to the Morocco full cost pool when drilling of the MZ-1
well associated with the Ouanoukrim prospect was completed
to its targeted depth below 20,000 feet to evaluate the primary
objectives and did not contain hydrocarbons. As FM O&G
does not have proved reserves or production in Morocco, an
impairment charge was recorded.
48
U.S. Oil and Gas Operations. Following is summary operating
results for the U.S. oil and gas operations for the years ended
December 31:
2015 2014 a 2013 a,b
Sales Volumes
Oil (MMBbls) 35.3 40.1 26.6
Natural gas (Bcf) 89.7 80.8 54.2
NGLs (MMBbls) 2.4 3.2 2.4
MMBOE 52.6 56.8 38.1
Average Realizationsc
Oil (per barrel) $ 57.11 $ 90.00 $ 98.32
Natural gas (per MMBtu) $ 2.59 $ 4.23 $ 3.99
NGLs (per barrel) $ 18.90 $ 39.73 $ 38.20
Gross (Loss) Profit per BOE
Realized revenuesc $ 43.54 $ 71.83 $ 76.87
Less: cash production costsc 18.59 20.08 17.14
Cash operating marginc 24.95 51.75 59.73
Less: depreciation, depletion
and amortization 34.28 40.34 35.81
Less: impairment of oil and
gas properties 246.67 65.80 —
Less: accretion and other costs 4.41d 1.69 0.79
Plus: net noncash mark-to-market
(losses) gains on derivative contracts (6.07) 11.03 (8.20)
Plus: other net adjustments 0.43 0.06 0.04
Gross (loss) profit $ (266.05) $ (44.99) $ 14.97
a. Includes results of Eagle Ford prior to its sale in June 2014.
b. Reflects the results of FM O&G beginning June 1, 2013.
c. Cash operating margin for oil and gas operations reflects realized revenues less cash
production costs. Realized revenues exclude noncash mark-to-market adjustments
on derivative contracts, and cash production costs exclude accretion and other costs.
For reconciliations of realized revenues (including average realizations for oil,
natural gas and NGLs) and cash production costs to revenues and production and
delivery costs reported in our consolidated financial statements, refer to the
supplemental schedule, “Product Revenues and Production Costs.”
d. Includes $3.58 per BOE primarily for other asset impairments and inventory write-
downs, idle/terminated rig costs and prior year non-income tax assessments at the
California properties.
Excluding the impact of realized cash gains (losses) on derivative
contracts of $11.53 per barrel for 2015, $(2.76) per barrel in 2014
and $(1.35) per barrel for the seven-month period from June 1,
2013, to December 31, 2013, the average realized price for crude
oil was $45.58 per barrel in 2015 (85 percent of the average Brent
crude oil price of $53.64 per barrel), $92.76 per barrel in 2014
(93 percent of the average Brent crude oil price of $99.45 per
barrel) and $99.67 per barrel for the seven-month period from
June 1, 2013, to December 31, 2013 (92 percent of the average
Brent crude oil price of $108.66 per barrel).
FM O&G’s average realized price for natural gas was $2.59 per
MMBtu in 2015, $4.23 per MMBtu in 2014 ($4.37 per MMBtu
excluding the impact of derivative contracts) and $3.99 per MMBtu
($3.73 per MMBtu excluding the impact of derivative contracts)
for the seven-month period from June 1, 2013, to December 31,
2013, compared to the NYMEX natural gas price average of $2.66
per MMBtu for the year 2015 contracts, $4.41 per MMBtu for the
year 2014 contracts, and $3.67 per MMBtu for the June through
December 2013 contracts.

2015 compared with 2014. Realized revenues for oil and gas
operations of $43.54 per BOE for the year 2015 were lower than
realized revenues of $71.83 per BOE for the year 2014, primarily
reflecting lower oil prices, partly offset by the impact of higher
cash gains on derivative contracts (cash gains of $7.72 per BOE in
2015, compared with cash losses of $2.15 per BOE in 2014).
Cash production costs for oil and gas operations of $18.59 per
BOE for the year 2015 were lower than cash production costs of
$20.08 for the year 2014, primarily reflecting lower well workover
expense and steam costs in California.
Based on current sales volume and cost estimates, cash
production costs are expected to decline to approximately $15 per
BOE for the year 2016, primarily reflecting increased production
from the Deepwater GOM and cost reduction efforts.
2014 compared with 2013. Realized revenues for oil and gas
operations of $71.83 per BOE for the year 2014 were lower than
realized revenues of $76.87 per BOE for the seven-month period
from June 1, 2013, to December 31, 2013, primarily reflecting
lower oil prices and higher cash losses on derivative contracts
(cash losses of $2.15 per BOE in 2014, compared with $0.58 per
BOE for the seven-month period from June 1, 2013, to
December 31, 2013).
Cash production costs of $20.08 per BOE for the year 2014 were
higher than cash production costs of $17.14 per BOE for the
seven-month period from June 1, 2013, to December 31, 2013,
primarily reflecting the sale of lower cost Eagle Ford properties in
June 2014 and higher operating costs in California and the GOM.
Daily Sales Volumes. Following is a summary of average sales
volumes per day by region for oil and gas operations for the
years ended December 31:
2015 2014 2013 a
Sales Volumes (MBOE per day):
GOM b 83 73 72
California 37 39 39
Haynesville/Madden/Other 24 20 c 21
Eagle Ford — 24 46
Total oil and gas operations 144 156 178
a. Reflects the results of FM O&G beginning June 1, 2013.
b. Includes sales from properties on the GOM Shelf and in the Deepwater GOM; 2015
also includes sales from properties in the Inboard Lower Tertiary/Cretaceous natural
gas trend.
c. Results include volume adjustments related to Eagle Ford’s pre-close sales; FM O&G
completed the sale of Eagle Ford in June 2014.
Daily sales volumes averaged 144 MBOE for the year 2015,
including 96 MBbls of crude oil, 246 MMcf of natural gas and
7 MBbls of NGLs; 156 MBOE for the year 2014, including 110 MBbls
of crude oil, 221 MMcf of natural gas and 9 MBbls of NGLs; and
178 MBOE for the seven-month period from June 1, 2013, including
124 MBbls of crude oil, 254 MMcf of natural gas and 11 MBbls of
NGLs. Oil and gas sales volumes are expected to average 158 MBOE
per day for the year 2016, comprised of 74 percent oil, 21 percent
natural gas and 5 percent NGLs.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
Exploration, Operating and Development Activities. Our oil and
gas business has significant proved, probable and possible
reserves with valuable infrastructure and associated resources
with long-term production and development potential.
Since commencing development activities in 2014 at its three
100-percent-owned production platforms in the Deepwater GOM,
FM O&G has drilled 14 wells in producing fields with positive
results, including the King D-10 well in fourth-quarter 2015. Four
of these wells have been brought on production, including the
King D-12 well in November 2015. FM O&G plans to complete and
place six additional wells on production in 2016.
We are taking continuing actions to reduce oil and gas costs
and capital expenditures, including undertaking a near-term
deferral of exploration and development activities by idling the
three Deepwater GOM drillships FM O&G has under contract. Past
investments are expected to enable production to be increased
from rates of 144 MBOE per day in 2015 to an average of 157 MBOE
per day in 2016 and 2017, and cash production costs to decline to
approximately $15 per BOE in 2016 and 2017.
FM O&G expects to incur idle rig costs associated with its
drillship contracts totaling an estimated $0.6 billion in 2016 and
$0.4 billion in 2017.
Oil and Gas Capital Expenditures. Capital expenditures for our oil
and gas operations totaled $3.0 billion in 2015 (including $2.5 billion
incurred for Deepwater GOM and $0.2 billion for the Inboard
Lower Tertiary/Cretaceous natural gas trend). Capital expenditures
for oil and gas operations for the year 2016 are estimated to
total $1.5 billion, which excludes $0.6 billion for idle rig costs.
Approximately 85 percent of the 2016 capital budget is expected
to be directed to the GOM. 
Deepwater GOM. FM O&G operates and owns 100-percent
working interests in the large-scale Holstein, Marlin and Horn
Mountain deepwater production platforms, which in total
have processing capacity of 250 MBbls of oil per day. In addition,
FM O&G has interests in the Lucius and Heidelberg oil fields
and in the Atwater Valley focus area, as well as interests in the
Ram Powell and Hoover deepwater production platforms.
During 2015, field development continued at Heidelberg in the
Green Canyon focus area, and first oil production commenced in
January 2016. Three wells are expected to begin producing during
the initial phase, and another two wells are scheduled to be
drilled and come on line at a later date. Heidelberg is a subsea
development consisting of five subsea wells tied back to a truss
spar hull located in 5,300 feet of water. Heidelberg field was
discovered in November 2008, and the subsequent development
project was sanctioned in early 2013. FM O&G has a 12.5 percent
working interest in Heidelberg.
During 2015, FM O&G continued drilling at Holstein Deep.
Completion activities for the initial three-well subsea tieback
development program are progressing on schedule, with first
production expected by mid-2016. In aggregate, the three wells are
estimated to commence production at approximately 24 MBOE
per day. The Holstein Deep development is located in Green Canyon
2015 ANNUAL REPORT 49
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
Block 643, west of the 100-percent-owned Holstein platform in
3,890 feet of water, with production facilities capable of processing
113 MBbls of oil per day.
FM O&G’s 100-percent-owned Marlin Hub is located in the
Mississippi Canyon focus area and has production facilities capable
of processing 60 MBbls of oil per day. FM O&G has drilled five
successful tieback opportunities in the area since 2014, including
the 100-percent-owned Dorado and King development projects.
During 2015, FM O&G drilled three successful wells at the King
field, which is located in Mississippi Canyon south of the Marlin
facility in 5,200 feet of water. During fourth-quarter 2015, FM O&G
established production from the first King well (D-12) and logged oil
pay in the King D-10 well. In 2016, FM O&G plans to complete and
tieback the King D-13 well to the Marlin production platform. The King
D-9 and D-10 wells are expected to be completed in future periods.
FM O&G’s 100-percent-owned Horn Mountain field is also
located in the Mississippi Canyon focus area and has production
facilities capable of processing 75 MBbls of oil per day. During
2015, FM O&G successfully drilled three wells in the Horn
Mountain area, including the Quebec/Victory (Q/V), Kilo/Oscar
(K/O) and Horn Mountain Deep wells. To enhance recovery of
remaining oil in place, future development plans will target
subsea tieback from multiple stacked sands in the area. In 2016,
FM O&G plans to complete and tie back two wells to the Horn
Mountain production platform, including the Q/V and K/O wells.
FM O&G has a broad set of assets with valuable infrastructure
and associated resources with attractive long-term production
and development potential, including the Vito and Power Nap oil
discoveries in the Atwater Valley area and a large Deepwater GOM
project inventory with over 150 undeveloped locations.
Inboard Lower Tertiary/Cretaceous. FM O&G has a position in
the Inboard Lower Tertiary/Cretaceous natural gas trend, located
onshore in South Louisiana. During November 2015, FM O&G
completed the installation of additional processing facilities to
accommodate higher flow rates from the Highlander well, which
began production in February 2015. In December 2015, gross rates
from the Highlander well averaged approximately 44 MMcf per
day (approximately 21 MMcf per day net to FM O&G). FM O&G is
the operator and has a 72 percent working interest and an
approximate 49 percent net revenue interest in Highlander.
California. Sales volumes from California averaged 37 MBOE
per day for 2015, compared with 39 MBOE per day for 2014.
FM O&G’s position in California is located onshore in the San
Joaquin Valley and Los Angeles Basin, and offshore in the Point
Pedernales field. Since second-quarter 2015, production from
Point Arguello platforms has been shut in following the shutdown
of a third-party operated pipeline system that transports oil to
various California refineries.
Haynesville. FM O&G has rights to a substantial natural gas
resource located in the Haynesville shale in Louisiana. Drilling
activities remain constrained in response to low natural gas prices
in order to maximize near-term cash flows and to preserve the
resource for potentially higher future natural gas prices.
50
CAPITAL RESOURCES AND LIQUIDITY
Our consolidated operating cash flows vary with prices realized
from copper, gold, molybdenum and oil sales, our sales volumes,
production costs, income taxes, other working capital changes
and other factors. During 2015, in response to weak market
conditions, we took actions to enhance our financial position,
including significant reductions in capital spending, production
curtailments at certain North and South America mines and
actions to reduce operating, exploration and administrative costs
(refer to “Operations” for further discussion). In addition, we
generated approximately $2 billion in gross proceeds from
at-the-market equity programs, and our Board reduced our annual
common stock dividend from $1.25 per share to $0.20 per share
in March 2015, and subsequently suspended the annual common
stock dividend in December 2015. Further weakening of
commodity prices in early 2016, and the uncertainty about the
timing of economic and commodity price recovery require us to
continue taking actions to strengthen our financial position,
reduce debt and re-focus our portfolio of assets. Our business
strategy is focused on our position as a leading global copper
producer. We will continue to manage our production activities,
spending on capital projects and operations, and the administration
of our business to enhance cash flows, and intend to complete
significant asset sale transactions to reduce debt.
Cash
Following is a summary of the U.S. and international components
of consolidated cash and cash equivalents, including cash
available to the parent company, net of noncontrolling interests’
share, taxes and other costs at December 31 (in millions):
2015 2014
Cash at domestic companies $ 6 $ 78
Cash at international operations 218 386
Total consolidated cash and cash equivalents 224 464
Less: noncontrolling interests’ share (44) (91)
Cash, net of noncontrolling interests’ share 180 373
Less: withholding taxes and other (11) (16)
Net cash available $ 169 $ 357
Cash held at our international operations is generally used to
support our foreign operations’ capital expenditures, operating
expenses, working capital and other tax payments or other cash
needs. Management believes that sufficient liquidity is available
in the U.S. from cash balances and availability from our revolving
credit facility and uncommitted lines of credit (refer to Note 8).
With the exception of TFM, we have not elected to permanently
reinvest earnings from our foreign subsidiaries, and we have
recorded deferred tax liabilities for foreign earnings that
are available to be repatriated to the U.S. From time to time, our
foreign subsidiaries distribute earnings to the U.S. through
dividends that are subject to applicable withholding taxes and
noncontrolling interests’ share.

Debt
We continue to focus on cost and capital management and cash
flow generation from our operations in the current weak
commodity price environment and are taking further immediate
actions to reduce debt by pursuing asset sales and joint venture
transactions. Following is a summary of our total debt and related
weighted-average interest rates at December 31 (in billions,
except percentages):
2015 2014
Weighted- Weighted-
Average Average
Interest Rate
Interest Rate
FCX Senior Notes $ 11.9 3.8% $ 11.9 3.8%
FCX Term Loan 3.0 2.2% 3.0 1.7%
FM O&G LLC Senior Notes 2.5 6.6% 2.6 6.6%
Cerro Verde Credit Facility 1.8 2.8% 0.4 2.1%
Other FCX debt 1.2 3 .9% 0.9 3.9%
Total debt $ 20.4 3 .8% $ 18.8 3.8%
As of December 31, 2015, we had $36 million in letters of credit
issued and availability of $4.0 billion under our credit facility.
In December 2015, we reached agreement with our bank group
to amend the Leverage Ratio (Net Debt/EBITDA, as defined in
the agreement) under our revolving credit facility and term loan
from the previous limit. In addition, the amendment increased the
interest rate spreads under specified conditions and requires
prepayment of the term loan with 50 percent of the net proceeds
of certain asset dispositions.
On February 26, 2016, we reached agreement with our bank
group to amend our revolving credit facility and term loan. The
changes pursuant to the revolving credit facility and the term loan
included modifications of the maximum leverage ratio and
minimum interest expense coverage ratio to provide us with
additional flexibility, and the commitment under our revolving
credit facility has been reduced by $500 million from $4.0 billion to
$3.5 billion. A springing collateral and guarantee trigger was added
to the revolving credit facility and term loan. Under this provision,
if we have not entered into definitive agreements for asset sales
totaling $3.0 billion in aggregate by June 30, 2016, that are
reasonably expected to close by December 31, 2016, we will be
required to secure the revolving credit facility and term loan with a
mutually acceptable collateral and guarantee package. If such
asset sales totaling $3.0 billion in aggregate have not occurred by
December 31, 2016, then the springing collateral and guarantee
trigger will go into effect.
Refer to Notes 8 and 18 for further discussion of our debt, include
the modifications to our revolving credit facility and term loan.
Operating Activities
We generated consolidated operating cash flows totaling
$3.2 billion in 2015 (including $0.4 billion in working capital sources
and changes in other tax payments), $5.6 billion in 2014 (net of
$0.6 billion for working capital uses and changes in other tax
payments) and $6.1 billion in 2013 (net of $0.4 billion for working
capital uses and changes in other tax payments).
MANAGEMENT’S DISCUSSION
AND ANALYSIS
Lower consolidated operating cash flows for 2015, compared
with 2014, primarily reflect the impact of lower commodity price
realizations, partly offset by an increase in working capital
sources mostly associated with accounts receivable associated
with settlements of oil and gas derivative contracts and inventories
reflecting a decrease in volumes and lower average costs.
Lower consolidated operating cash flows for 2014, compared
with 2013, reflect the impact of lower copper and gold price
realizations and lower copper sales volumes, partly offset by a full
year of our oil and gas operations.
Based on current operating plans and subject to future
commodity prices for copper, gold, molybdenum and crude oil,
we expect estimated consolidated operating cash flows for
the year 2016, plus available cash and availability under our credit
facility and uncommitted lines of credit, to be sufficient to fund
our budgeted capital expenditures, scheduled debt maturities,
noncontrolling interest distributions and other cash requirements
for the year 2016. Refer to “Outlook” for further discussion of
projected operating cash flows for the year 2016.
Investing Activities
Capital Expenditures. Capital expenditures, including capitalized
interest, totaled $6.35 billion in 2015 (including $2.4 billion for
major projects at mining operations and $3.0 billion for oil and
gas operations), $7.2 billion in 2014 (including $2.9 billion for
major projects at mining operations and $3.2 billion for oil and
gas operations) and $5.3 billion in 2013 (including $2.3 billion for
major projects at mining operations and $1.45 billion for oil and
gas operations).
Lower capital expenditures in 2015, compared with 2014,
primarily reflected decreased spending for major projects at
mining operations, mostly resulting from the completion of the
Morenci mill expansion (substantially completed in May 2014).
Higher capital expenditures in 2014, compared with 2013, reflect
increased capital expenditures at our oil and gas operations and
increased spending for major projects at mining operations
primarily associated with the expansion project at Cerro Verde.
Refer to “Outlook” for further discussion of projected capital
expenditures for the year 2016.
Dispositions and Acquisitions. In November 2014, we completed
the sale of our 80 percent ownership interests in the Candelaria
and Ojos del Salado mines for $1.8 billion in cash (after-tax net
proceeds of $1.5 billion).
In June 2014, we completed the sale of the Eagle Ford shale
assets for cash consideration of $3.1 billion. Approximately
$1.3 billion of the proceeds was placed in a like-kind exchange
escrow to reinvest in additional oil and gas interests and the
remaining net proceeds were used to repay debt. In June 2014
and September 2014, we completed acquisitions of Deepwater
GOM interests totaling $1.4 billion.
In June 2013, we paid $3.5 billion in cash (net of cash
acquired) for the acquisition of Plains Exploration & Production
Company (PXP) and $1.6 billion in cash (net of cash acquired)
for the acquisition of MMR.
2015 ANNUAL REPORT 51
 MANAGEMENT’S DISCUSSION
AND ANALYSIS
In March 2013, we paid $348 million (net of cash acquired) for
the acquisition of a cobalt chemical refinery in Kokkola, Finland,
and the related sales and marketing business. The acquisition was
funded 70 percent by us and 30 percent by Lundin, our joint
venture partner.
Refer to Note 2 for further discussion of these dispositions
and acquisitions.
Financing Activities
Debt Transactions. Net proceeds from debt in 2015 primarily
include borrowings of $1.4 billion under Cerro Verde’s nonrecourse
senior unsecured credit facility to fund its expansion project.
During 2014, we completed the sale of $3.0 billion of senior
notes, which were comprised of four tranches with a weighted-
average interest rate of 4.1 percent. The proceeds from these
senior notes were used to fund our December 2014 tender offers
for $1.14 billion aggregate principal of senior notes (with a
weighted-average interest rate of 6.5 percent), essentially all of
our 2015 scheduled maturities (including scheduled term loan
amortization and $500 million of 1.40% Senior Notes), $300 million
in 7.625% Senior Notes, and to repay borrowings under our
revolving credit facility. Other senior note redemptions during
2014 include $400 million of our 8.625% Senior Notes, $1.7 billion
of the aggregate principal amount of certain senior notes (with
a weighted-average interest rate of 6.6 percent) and $210 million
of the aggregate principal amount of our 6.625% Senior Notes.
During 2013, we sold $6.5 billion of senior notes in four
tranches with a weighted-average interest rate of 3.9 percent, and
borrowed $4.0 billion under an unsecured bank term loan with
an interest rate of London Interbank Offered Rate (LIBOR) plus
1.75 percent. Net proceeds from these borrowings were used to
fund the acquisitions of PXP and MMR, repay certain debt of PXP
and for general corporate purposes. Also in 2013, we redeemed
the $299 million of MMR’s outstanding 11.875% Senior Notes and
$400 million of PXP’s 75/ 8 % Senior Notes, which were assumed
in the acquisitions.
Refer to Note 8 for further discussion of these transactions.
Equity Transactions. Since August 2015 and through January 5,
2016, we sold 210 million shares of common stock, generating
gross proceeds of approximately $2 billion under our at-the-
Debt maturities $ 20,347 $ 649 $ 5,199 $ 4,311 $ 10,188
Scheduled interest payment obligationsa 7,258 760 1,428 1,155 3,915
ARO and environmental obligationsb 8,538 324 907 325 6,982
Take-or-pay contracts:
Mining operationsc 2,156 1,150 481 112 413
Oil and gas operationsd 1,773 1,035 615 54 69
Operating lease obligations 337 54 89 48 146
Totale $ 40,409 $ 3,972 $ 8,719 $ 6,005 $ 21,713
a. Scheduled interest payment obligations were calculated using stated coupon rates for fixed-rate debt and interest rates applicable at December 31, 2015, for variable-rate debt.
b. Represents estimated cash payments, on an undiscounted and unescalated basis, associated with ARO and environmental activities (including $2.1 billion for our oil and gas operations).
The timing and the amount of these payments could change as a result of changes in regulatory requirements, changes in scope and timing of ARO activities, the settlement of
environmental matters and as actual spending occurs. Refer to Note 12 for additional discussion of environmental and ARO matters.
52
market equity programs (including 206 million shares of common
stock, generating gross proceeds of $1.96 billion during 2015).
Net proceeds from the at-the-market equity programs were used
for general corporate purposes, including the repayment of
amounts outstanding under the revolving credit facility and
other borrowings, and the financing of working capital and
capital expenditures. Refer to Note 10 for further discussion.
During 2013, conversion of MMR’s 8% Convertible Perpetual
Preferred Stock and 5.75% Convertible Perpetual Preferred
Stock, Series 1 required cash payments of $228 million. Refer to
Note 2 for further discussion.
Dividends. We paid dividends on our common stock totaling
$605 million in 2015 (including $115 million for special dividends
of $0.1105 per share paid in accordance with the settlement terms
of the shareholder derivative litigation), $1.3 billion in 2014
and $2.3 billion in 2013 (including $1.0 billion for a supplemental
dividend of $1.00 per share paid in July 2013).
In March 2015, our Board reduced our annual common stock
dividend from $1.25 per share to $0.20 per share, and in
December 2015, our Board suspended the annual common stock
dividend. These actions will provide annual cash savings of
approximately $1.6 billion (based on outstanding common shares
of 1.25 billion at December 31, 2015) and further enhance our
liquidity during this period of weak market conditions. The
declaration of dividends is at the discretion of our Board and will
depend upon our financial results, cash requirements, future
prospects and other factors deemed relevant by our Board.
Cash dividends and other distributions paid to noncontrolling
interests totaled $120 million in 2015, $424 million in 2014 and
$256 million in 2013. These payments will vary based on the
operating results and cash requirements of our consolidated
subsidiaries.
CONTRACTUAL OBLIGATIONS
We have contractual and other long-term obligations, including
debt maturities based on the principal amounts, which we expect
to fund with available cash, projected operating cash flows,
availability under our revolving credit facility or future financing
transactions, if necessary. Following is a summary of these various
obligations at December 31, 2015 (in millions):
Total 2016 2017 to 2018 2019 to 2020 Thereafter
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

c. Represents contractual obligations for purchases of goods or services agreements enforceable and legally binding and that specify all significant terms including the procurement
of copper concentrate ($854 million), electricity ($601 million) and transportation services ($450 million). Some of our take-or-pay contracts are settled based on the prevailing market rate
for the service or commodity purchased, and in some cases, the amount of the actual obligation may change over time because of market conditions. Obligations for copper concentrate
provide for deliveries of specified volumes to Atlantic Copper at market-based prices. Electricity obligations are primarily for contractual minimum demand at the South America mines.
Transportation obligations are primarily for South America contracted ocean freight.
d. Represents contractual obligations for purchases of goods or service agreements enforceable and legally binding and that specify all significant terms, including minimum commitments
for Deepwater GOM drillships ($1.2 billion) and transportation services ($221 million). Drillship obligations provide for an operating rate over the contractual term. Transportation
obligations are primarily for FM O&G contracted rates for natural gas and crude oil gathering systems.
e. This table excludes certain other obligations in our consolidated balance sheets, such as estimated funding for pension, postretirement and other employee benefit obligations as the
funding may vary from year to year based on changes in the fair value of plan assets and actuarial assumptions, commitments and contingencies totaling $101 million and unrecognized
tax benefits totaling $152 million where the timing of settlement is not determinable, and other less significant amounts. This table also excludes purchase orders for the purchase of
inventory and other goods and services, as purchase orders typically represent authorizations to purchase rather than binding agreements.

In addition to our debt maturities and other contractual
obligations discussed above, we have other commitments, which
we expect to fund with available cash, projected operating cash
flows, available credit facilities or future financing transactions, if
necessary. These include (i) PT-FI’s commitment to provide one
percent of its annual revenue for the development of the local
people in its area of operations through the Freeport Partnership
Fund for Community Development, (ii) TFM’s commitment to
provide 0.3 percent of net sales revenue from production for the
development of the local people in its area of operations,
(iii) Cerro Verde’s scheduled installment payments for disputed
mining royalty assessments and (iv) other commercial
commitments, including standby letters of credit, surety bonds
and guarantees. Refer to Notes 12 and 13 for further discussion.
CONTINGENCIES
Environmental
The cost of complying with environmental laws is a fundamental
and substantial cost of our business. At December 31, 2015,
we had $1.2 billion recorded in our consolidated balance sheet for
environmental obligations attributed to CERCLA or analogous
state programs and for estimated future costs associated with
environmental obligations that are considered probable based on
specific facts and circumstances.
During 2015, we incurred environmental capital expenditures
and other environmental costs (including our joint venture
partners’ shares) of $421 million for programs primarily to comply
with applicable environmental laws and regulations that affect our
operations, compared with $405 million in 2014 and $595 million
in 2013. Higher costs in 2013 primarily reflect the completion of a
water treatment facility at one of our molybdenum mines.
For 2016, we expect to incur approximately $495 million of
aggregate environmental capital expenditures and other
environmental costs, which are part of our overall 2016 operating
budget. The timing and amount of estimated payments could
change as a result of changes in regulatory requirements, changes
in scope and timing of reclamation activities, the settlement of
environmental matters and as actual spending occurs.
Refer to Note 12 and “Risk Factors” contained in Part I, Item 1A.
of our annual report on Form 10-K for the year ended December 31,
2015, for further information about environmental regulation,
including significant environmental matters.
Asset Retirement Obligations
We recognize AROs as liabilities when incurred, with the initial
measurement at fair value. These obligations, which are initially
estimated based on discounted cash flow estimates, are accreted
to full value over time through charges to cost of sales. Mine
reclamation costs for disturbances are recorded as an ARO and as
a related asset retirement cost (ARC) (included in property, plant,
equipment and development costs) in the period of disturbance.
Oil and gas plugging and abandonment costs are recognized as
an ARO and as a related ARC (included in oil and gas properties)
in the period in which the well is drilled or acquired. Our cost
estimates are reflected on a third-party cost basis and comply
with our legal obligation to retire tangible, long-lived assets. At
December 31, 2015, we had $2.8 billion recorded in our consolidated
balance sheet for AROs, including $1.1 billion related to our oil
and gas properties. Spending on AROs totaled $133 million in 2015,
$99 million in 2014 and $107 million in 2013 (including $92 million
in 2015, $74 million in 2014 and $64 million in 2013 for our oil
and gas operations). For 2016, we expect to incur approximately
$172 million for aggregate ARO payments. Refer to Note 12 for
further discussion.
Litigation and Other Contingencies
Refer to Notes 2 and 12 and “Legal Proceedings” contained in
Part I, Item 3. of our annual report on Form 10-K for the year
ended December 31, 2015, for further discussion of contingencies
associated with legal proceedings and other matters.
DISCLOSURES ABOUT MARKET RISKS
Commodity Price Risk
Metals. Our consolidated revenues from our mining operations
include the sale of copper concentrate, copper cathode, copper
rod, gold, molybdenum and other metals by our North and
South America mines, the sale of copper concentrate (which also
contains significant quantities of gold and silver) by our
Indonesia mining operations, the sale of copper cathode and
cobalt hydroxide by our Africa mining operations, the sale of
molybdenum in various forms by our molybdenum operations,
and the sale of copper cathode, copper anode and gold in anode
and slimes by Atlantic Copper. Our financial results can vary
significantly as a result of fluctuations in the market prices of
copper, gold, molybdenum, silver and cobalt. For projected

2015 ANNUAL REPORT 53

 MANAGEMENT’S DISCUSSION
AND ANALYSIS

sensitivities of our operating cash flow to changes in commodity
prices, refer to “Outlook.” World market prices for these
commodities have fluctuated historically and are affected by
numerous factors beyond our control. Refer to “Risk Factors”
contained in Part I, Item 1A. of our annual report on Form 10-K for
the year ended December 31, 2015, for further discussion of
financial risks associated with fluctuations in the market prices of
the commodities we sell.
For 2015, 43 percent of our mined copper was sold in
concentrate, 33 percent as cathode and 24 percent as rod from
North America operations. Substantially all of our copper
concentrate and cathode sales contracts provide final copper
pricing in a specified future month (generally one to four months
from the shipment date) based primarily on quoted LME monthly
average spot copper prices. We receive market prices based on
prices in the specified future period, which results in price
fluctuations recorded through revenues until the date of
settlement. We record revenues and invoice customers at the time
of shipment based on then-current LME prices, which results in
an embedded derivative on our provisionally priced concentrate
and cathode sales that is adjusted to fair value through earnings
each period, using the period-end forward prices, until final pricing
on the date of settlement. To the extent final prices are higher or
lower than what was recorded on a provisional basis, an increase
or decrease to revenues is recorded each reporting period until the
date of final pricing. Accordingly, in times of rising copper prices,
our revenues benefit from adjustments to the final pricing of
provisionally priced sales pursuant to contracts entered into in
prior periods; in times of falling copper prices, the opposite occurs.
Following are the unfavorable impacts of net adjustments
to the prior years’ provisionally priced copper sales for the years
ended December 31 (in millions, except per share amounts):
2015 2014 2013
Revenues $ (107) $ (118) $ (26)
Net income attributable to
common stockholders $ (53) $ (65) $ (12)
Net income per share attributable to
common stockholders $ (0.05) $ (0.06) $ (0.01)
At December 31, 2015, we had provisionally priced copper sales at
our copper mining operations totaling 515 million pounds of copper
(net of intercompany sales and noncontrolling interests) recorded
at an average price of $2.13 per pound, subject to final pricing over
the next several months. We estimate that each $0.05 change in the
price realized from the December 31, 2015, provisional price
recorded would have an approximate $19 million effect on 2016 net
income attributable to common stockholders. The LME spot copper
price closed at $2.08 per pound on February 19, 2016.
Oil & Gas. Our financial results from oil and gas operations
vary with fluctuations in crude oil prices and, to a lesser extent,
natural gas prices. Market prices for crude oil and natural gas
have fluctuated historically and are affected by numerous factors
beyond our control. Refer to “Risk Factors” contained in Part 1,
Item 1A. of our annual report on Form 10-K for the year ended
December 31, 2015, for further discussion of financial risks
associated with fluctuations in the market prices of the commodities
we sell.
Foreign Currency Exchange Risk
The functional currency for most of our operations is the U.S.
dollar. Substantially all of our revenues and a significant portion
of our costs are denominated in U.S. dollars; however, some
costs and certain asset and liability accounts are denominated in
local currencies, including the Indonesian rupiah, Australian
dollar, Chilean peso, Peruvian sol and euro. We recognized foreign
currency translation losses on balances denominated in foreign
currencies totaling $93 million in 2015, $4 million in 2014 and
$36 million in 2013, primarily at our Indonesia and South America
mines. Generally, our operating results are positively affected
when the U.S. dollar strengthens in relation to those foreign
currencies and adversely affected when the U.S. dollar weakens
in relation to those foreign currencies.
Following is a summary of estimated annual payments and
the impact of changes in foreign currency rates on our annual
operating costs:

10% Change in
Exchange Rate per $1 Exchange Rate
at December 31, Estimated Annual Payments (in millions)a
2015 2014 2013 (in local currency) (in millions)b Increase Decrease

Indonesia
Rupiah 13,726 12,378
12,128 8.8
trillion $
641 $
(58) $
71
Australian dollar 1.37 1.22 1.12 200
million $ 146 $
(13) $
15
South America
Chilean peso 710 607 525 155
billion $
218 $
(20) $
25
Peruvian sol 3.41
2.99
2.80 835
million $
244 $
(22) $
27
Atlantic Copper
Euro 0.92
0.82
0.73 135
million $
147 $
(13) $
15
a. Reflects the estimated impact on annual operating costs assuming a 10 percent increase or decrease in the exchange rate reported at December 31, 2015.
b. Based on December 31, 2015, exchange rates.

54

Interest Rate Risk
At December 31, 2015, we had total debt maturities based on the
principal amounts of $20.3 billion, of which approximately 32 percent
was variable-rate debt with interest rates based on the LIBOR
or the Euro Interbank Offered Rate. The table below presents
2016 2017 2018 2019 2020 Thereafter Fair Value
Fixed-rate debt $ 3 $ 1,251 $ 1,500 $ 237 $ 1,618 $ 10,084 $ 9,473
Average interest rate 1.4% 2.2% 2.4% 6.1% 4.4% 4.9% 4.4%
Variable-rate debt $ 646 $ 542 $ 1,906 $ 1,202 $ 1,254 $ 104 $ 4,514
Average interest rate 1.6% 2.5% 2.5% 2.8% 2.2% 4.3% 2.4%
NEW ACCOUNTING STANDARDS
We do not expect the provisions of recently issued accounting
standards to have a significant impact on our future financial
statements and disclosures. Refer to Note 1 for further discussion.
OFF-BALANCE SHEET ARRANGEMENTS
Refer to Note 13 for discussion of off-balance sheet arrangements.
PRODUCT REVENUES AND PRODUCTION COSTS
Mining Product Revenues and Unit Net Cash Costs
Unit net cash costs per pound of copper and molybdenum are
measures intended to provide investors with information about
the cash-generating capacity of our mining operations expressed
on a basis relating to the primary metal product for the respective
operations. We use this measure for the same purpose and
for monitoring operating performance by our mining operations.
This information differs from measures of performance
determined in accordance with U.S. GAAP and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. This
measure is presented by other metals mining companies,
although our measures may not be comparable to similarly titled
measures reported by other companies.
We present gross profit per pound of copper in the following
tables using both a “by-product” method and a “co-product”
method. We use the by-product method in our presentation of
gross profit per pound of copper because (i) the majority of our
revenues are copper revenues, (ii) we mine ore, which contains
copper, gold, molybdenum and other metals, (iii) it is not possible
to specifically assign all of our costs to revenues from the copper,
gold, molybdenum and other metals we produce, (iv) it is the
method used to compare mining operations in certain industry
publications and (v) it is the method used by our management
and the Board to monitor operations. In the co-product method
presentation below, shared costs are allocated to the different
products based on their relative revenue values, which will vary to
the extent our metals sales volumes and realized prices change.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
average interest rates for our scheduled maturities of principal
for our outstanding debt (excluding fair value adjustments)
and the related fair values at December 31, 2015 (in millions,
except percentages):
We show revenue adjustments for prior period open sales as
separate line items. Because these adjustments do not result from
current period sales, we have reflected these separately from
revenues on current period sales. Noncash and other costs
consist of items such as stock-based compensation costs, start-up
costs, inventory adjustments, long-lived asset impairments,
restructuring, write-offs of equipment and/or unusual charges,
which are removed from site production and delivery costs in the
calculation of unit net cash costs. As discussed above, gold,
molybdenum and other metal revenues at copper mines are
reflected as credits against site production and delivery costs in
the by-product method. The following schedules for our mining
operations are presentations under both the by-product and
co-product methods together with reconciliations to amounts
reported in our consolidated financial statements.
Oil and Gas Product Revenues and Cash Production Costs per Unit
Realized revenues and cash production costs per unit are
measures intended to provide investors with information about
the cash operating margin of our oil and gas operations expressed
on a basis relating to each product sold. We use this measure for
the same purpose and for monitoring operating performance by
our oil and gas operations. This information differs from
measures of performance determined in accordance with U.S.
GAAP and should not be considered in isolation or as a substitute
for measures of performance determined in accordance with
U.S. GAAP. Our measures may not be comparable to similarly
titled measures reported by other companies.
We show revenue adjustments from derivative contracts as
separate line items. Because these adjustments do not result from
oil and gas sales, these gains and losses have been reflected
separately from revenues on current period sales. Additionally,
accretion, charges for asset retirement obligations and other
costs, such as idle/terminated rig costs, inventory write-downs
and/or unusual charges, are removed from production and delivery
costs in the calculation of cash production costs per BOE. The
following schedules include calculations of oil and gas product
revenues and cash production costs together with a reconciliation
to amounts reported in our consolidated financial statements.
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 MANAGEMENT’S DISCUSSION
AND ANALYSIS

North America Copper Mines Product Revenues and Production Costs

By-Product Co-Product Method

Year Ended December 31, 2015 Method Copper Molybdenuma Otherb Total
(In millions)

Revenues, excluding adjustments $ 4,907 $ 4,907 $ 261 $ 102 $ 5,270

Site production and delivery, before net noncash and other costs shown below 3,339 3,161 209 71 3,441
By-product credits (261) — — — —
Treatment charges 240 233 — 7 240
Net cash costs 3,318 3,394 209 78 3,681
Depreciation, depletion and amortization 558 528 20 10 558
Copper and molybdenum inventory adjustments 142 139 2 1 142
Noncash and other costs, net 233c 225 6 2 233
Total costs 4,251 4,286 237 91 4,614
Revenue adjustments, primarily for pricing on prior period open sales (28) (28) — — (28)
Gross profit $ 628 $ 593 $ 24 $ 11 $ 628

Copper sales (millions of recoverable pounds) 1,985 1,985

Molybdenum sales (millions of recoverable pounds)a 37

Gross profit per pound of copper/molybdenum:

Revenues, excluding adjustments $ 2.47 $ 2.47 $ 7.02

Site production and delivery, before net noncash and other costs shown below 1.68 1.59 5.61
By-product credits (0.13) — —
Treatment charges 0.12 0.12 —
Unit net cash costs 1.67 1.71 5.61
Depreciation, depletion and amortization 0.28 0.27 0.53
Copper and molybdenum inventory adjustments 0.07 0.07 0.07
Noncash and other costs, net 0.12c 0.11 0.16
Total unit costs 2.14 2.16 6.37
Revenue adjustments, primarily for pricing on prior period open sales (0.01) (0.01) —
Gross profit per pound $ 0.32 $ 0.30 $ 0.65

Reconciliation to Amounts Reported

Copper and
Depreciation, Molybdenum
Production Depletion and Inventory
Revenues and Delivery Amortization Adjustments
(In millions)

Totals presented above $ 5,270 $ 3,441 $ 558 $ 142

Treatment charges — 240 — —
Noncash and other costs, net — 233c — —
Revenue adjustments, primarily for pricing on prior period open sales (28) — — —
Eliminations and other (116) (115) 2 —
North America copper mines 5,126 3,799 560 142
Other mining & eliminationsd 8,756 6,536 1,119 196
Total mining 13,882 10,335 1,679 338
U.S. oil & gas operations 1,994 1,211 1,804 —
Corporate, other & eliminations 1 (1) 14 —
As reported in FCX’s consolidated financial statements $ 1 5,877 $ 11,545 $ 3,497 $ 338

a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b. Includes gold and silver product revenues and production costs.
c. Includes $99 million ($0.05 per pound) for impairment, restructuring charges and other net charges.
d. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

56
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

North America Copper Mines Product Revenues and Production Costs (continued)

By-Product Co-Product Method

Year Ended December 31, 2014 Method Copper Molybdenuma Otherb Total
(In millions)

Revenues, excluding adjustments $ 5,186 $ 5,186 $ 386 $ 120 $ 5,692

Site production and delivery, before net noncash and other costs shown below 3,057 2,860 226 78 3,164
By-product credits (399) — — — —
Treatment charges 203 198 — 5 203
Net cash costs 2,861 3,058 226 83 3,367
Depreciation, depletion and amortization 473 448 19 6 473
Noncash and other costs, net 149 146 2 1 149
Total costs 3,483 3,652 247 90 3,989
Revenue adjustments, primarily for pricing on prior period open sales (7) (7) — — (7)
Gross profit $ 1,696 $ 1,527 $ 139 $ 30 $ 1,696
Copper sales (millions of recoverable pounds) 1,657 1,657
Molybdenum sales (millions of recoverable pounds)a 33
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments $ 3.13 $ 3.13 $ 11.74
Site production and delivery, before net noncash and other costs shown below 1.85 1.73 6.85
By-product credits (0.24) — —
Treatment charges 0.12 0.12 —
Unit net cash costs 1.73 1.85 6.85
Depreciation, depletion and amortization 0.29 0.27 0.60
Noncash and other costs, net 0.09 0.09 0.07
Total unit costs 2.11 2.21 7.52
Revenue adjustments, primarily for pricing on prior period open sales — — —
Gross profit per pound $ 1.02 $ 0.92 $ 4.22

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 5,692 $ 3,164 $ 473

Treatment charges — 203 —
Noncash and other costs, net — 149 —
Revenue adjustments, primarily for pricing on prior period open sales (7) — —
Eliminations and other (69) (76) 11
North America copper mines 5,616 3,440 484
Other mining & eliminationsc 11,112 7,219 1,074
Total mining 16,728 10,659 1,558
U.S. oil & gas operations 4,710 1,237 2,291
Corporate, other & eliminations — 2 14
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863

a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b. Includes gold and silver product revenues and production costs.
c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16. 

57
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

North America Copper Mines Product Revenues and Production Costs (continued)

By-Product Co-Product Method

Year Ended December 31, 2013 Method Copper Molybdenuma Otherb Total
(In millions)

Revenues, excluding adjustments $ 4,752 $ 4,752 $ 349 $ 106 $ 5,207

Site production and delivery, before net noncash and other costs shown below 2,828 2,744 123 74 2,941
By-product credits (342) — — — —
Treatment charges 155 151 — 4 155
Net cash costs 2,641 2,895 123 78 3,096
Depreciation, depletion and amortization 391 378 7 6 391
Noncash and other costs, net 202c 200 1 1 202
Total costs 3,234 3,473 131 85 3,689
Revenue adjustments, primarily for pricing on prior period open sales (4) (4) — — (4)
Gross profit $ 1,514 $ 1,275 $ 218 $ 21 $ 1,514
Copper sales (millions of recoverable pounds) 1,416 1,416
Molybdenum sales (millions of recoverable pounds)a 32
Gross profit per pound of copper/molybdenum:
Revenues, excluding adjustments $ 3.36 $ 3.36 $ 10.79
Site production and delivery, before net noncash and other costs shown below 2.00 1.94 3.79
By-product credits (0.24) — —
Treatment charges 0.11 0.11 —
Unit net cash costs 1.87 2.05 3.79
Depreciation, depletion and amortization 0.28 0.27 0.22
Noncash and other costs, net 0.14c 0.14 0.04
Total unit costs 2.29 2.46 4.05
Revenue adjustments, primarily for pricing on prior period open sales — — —
Gross profit per pound $ 1.07 $ 0.90 $ 6.74

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 5,207 $ 2,941 $ 391

Treatment charges — 155 —
Noncash and other costs, net — 202c —
Revenue adjustments, primarily for pricing on prior period open sales (4) — —
Eliminations and other (20) (32) 11
North America copper mines 5,183 3,266 402
Other mining & eliminationsd 13,118 7,882 1,020
Total mining 18,301 11,148 1,422
U.S. oil & gas operations 2,616 682 1,364
Corporate, other & eliminations 4 7 11
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797

a. Reflects sales of molybdenum produced by certain of the North America copper mines to our molybdenum sales company at market-based pricing.
b. Includes gold and silver product revenues and production costs.
c. Includes $76 million ($0.05 per pound) associated with updated mine plans at Morenci that resulted in a loss in recoverable copper in leach stockpiles.
d. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16. 

58
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

South America Mining Product Revenues and Production Costs

By-Product Co-Product Method
Year Ended December 31, 2015 Method Copper Othera Total
(In millions)

Revenues, excluding adjustments $ 2,075 $ 2,075 $ 65 $ 2,140

Site production and delivery, before net noncash and other costs shown below 1,393 1,355 59 1,414
By-product credits (44) — — —
Treatment charges 161 161 — 161
Royalty on metals 4 4 — 4
Net cash costs 1,514 1,520 59 1,579
Depreciation, depletion and amortization 352 341 11 352
Copper inventory adjustments 73 73 — 73
Noncash and other costs, net 41 41 — 41
Total costs 1,980 1,975 70 2,045
Revenue adjustments, primarily for pricing on prior period open sales (28) (28) — (28)
Gross profit (loss) $ 67 $ 72 $ (5) $ 67

Copper sales (millions of recoverable pounds) 871 871

Gross profit per pound of copper:

Revenues, excluding adjustments $ 2.38 $ 2.38

Site production and delivery, before net noncash and other costs shown below 1.60 1.56
By-product credits (0.05) —
Treatment charges 0.19 0.19
Royalty on metals — —
Unit net cash costs 1.74 1.75
Depreciation, depletion and amortization 0.40 0.39
Copper inventory adjustments 0.08 0.08
Noncash and other costs, net 0.05 0.05
Total unit costs 2.27 2.27
Revenue adjustments, primarily for pricing on prior period open sales (0.03) (0.03)
Gross profit per pound $ 0.08 $ 0.08

Reconciliation to Amounts Reported

Copper and
Depreciation, Molybdenum
Production Depletion and Inventory
Revenues and Delivery Amortization Adjustments
(In millions)

Totals presented above $ 2,140 $ 1,414 $ 352 $ 73

Treatment charges (161) — — —
Royalty on metals (4) — — —
Noncash and other costs, net — 41 — —
Revenue adjustments, primarily for pricing on prior period open sales (28) — — —
Eliminations and other (13) (17) — —
South America mining 1,934 1,438 352 73
Other mining & eliminationsb 11,948 8,897 1,327 265
Total mining 13,882 10,335 1,679 338
U.S. oil & gas operations 1,994 1,211 1,804 —
Corporate, other & eliminations 1 (1) 14 —
As reported in FCX’s consolidated financial statements $
15,877 $ 11,545 $
3,497 $ 338

a. Includes silver sales of 2.0 million ounces ($14.48 per ounce average realized price). Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company
at market-based pricing.
b. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

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 MANAGEMENT’S DISCUSSION
AND ANALYSIS

South America Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method
Year Ended December 31, 2014 Method Copper Othera Total
(In millions)

Revenues, excluding adjustments $ 3,498 $ 3,498 $ 269 $ 3,767

Site production and delivery, before net noncash and other costs shown below 1,839 1,710 151 1,861
By-product credits (247) — — —
Treatment charges 191 191 — 191
Royalty on metals 6 5 1 6
Net cash costs 1,789b 1,906 152 2,058
Depreciation, depletion and amortization 367 345 22 367
Noncash and other costs, net 67 64 3 67
Total costs 2,223 2,315 177 2,492
Revenue adjustments, primarily for pricing on prior period open sales (65) (65) — (65)
Gross profit $ 1,210 $ 1,118 $ 92 $ 1,210
Copper sales (millions of recoverable pounds) 1,135b 1,135
Gross profit per pound of copper:
Revenues, excluding adjustments $ 3.08 $ 3.08
Site production and delivery, before net noncash and other costs shown below 1.62 1.51
By-product credits (0.22) —
Treatment charges 0.17 0.17
Royalty on metals 0.01 —
Unit net cash costs 1.58b 1.68
Depreciation, depletion and amortization 0.32 0.31
Noncash and other costs, net 0.06 0.06
Total unit costs 1.96 2.05
Revenue adjustments, primarily for pricing on prior period open sales (0.05) (0.05)
Gross profit per pound $ 1.07 $ 0.98

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 3,767 $ 1,861 $ 367

Treatment charges (191) — —
Royalty on metals (6) — —
Noncash and other costs, net — 67 —
Revenue adjustments, primarily for pricing on prior period open sales (65) — —
Eliminations and other 27 11 —
South America mining 3,532 1,939 367
Other mining & eliminationsc 13,196 8,720 1,191
Total mining 16,728 10,659 1,558
U.S. oil & gas operations 4,710 1,237 2,291
Corporate, other & eliminations — 2 14
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863
a. Includes gold sales of 67 thousand ounces ($1,271 per ounce average realized price) and silver sales of 2.9 million ounces ($18.54 per ounce average realized price).
Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b. Following is a reconciliation of South America mining’s 2014 unit net cash costs, excluding the Candelaria and Ojos del Salado mines:
Copper Sales Unit Net
(millions of Cash Costs
Net Cash Costs recoverable (per pound
(in millions) pounds) of copper)

Presented above $ 1,789 1,135 $ 1.58

Less: Candelaria and Ojos del Salado mines 425 268
$ 1,364 867 $ 1.57

c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

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 MANAGEMENT’S DISCUSSION
AND ANALYSIS

South America Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method
Year Ended December 31, 2013 Method Copper Othera Total
(In millions)

Revenues, excluding adjustments $ 4,366 $ 4,366 $ 374 $ 4,740

b
Site production and delivery, before net noncash and other costs shown below 2,023 1,875 170 2,045
By-product credits (352) — — —
Treatment charges 226 226 — 226
Net cash costs 1,897c 2,101 170 2,271
Depreciation, depletion and amortization 346 323 23 346
Noncash and other costs, net 49 44 5 49
Total costs 2,292 2,468 198 2,666
Revenue adjustments, primarily for pricing on prior period open sales (28) (28) — (28)
Gross profit $ 2,046 $ 1,870 $ 176 $ 2,046
Copper sales (millions of recoverable pounds) 1,325c 1,325
Gross profit per pound of copper:
Revenues, excluding adjustments $ 3.30 $ 3.30
Site production and delivery, before net noncash and other costs shown below 1.53b 1.42
By-product credits (0.27) —
Treatment charges 0.17 0.17
Unit net cash costs 1.43c 1.59
Depreciation, depletion and amortization 0.26 0.24
Noncash and other costs, net 0.04 0.03
Total unit costs 1.73 1.86
Revenue adjustments, primarily for pricing on prior period open sales (0.03) (0.03)
Gross profit per pound $ 1.54 $ 1.41

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 4,740 $ 2,045b $ 346

Treatment charges (226) — —
Noncash and other costs, net — 49 —
Revenue adjustments, primarily for pricing on prior period open sales (28) — —
Eliminations and other (1) (25) —
South America mining 4,485 2,069 346
Other mining & eliminationsd 13,816 9,079 1,076
Total mining 18,301 11,148 1,422
U.S. oil & gas operations 2,616 682 1,364
Corporate, other & eliminations 4 7 11
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797

a. Includes gold sales of 102 thousand ounces ($1,350 per ounce average realized price) and silver sales of 4.1 million ounces ($21.88 per ounce average realized price).
Also reflects sales of molybdenum produced by Cerro Verde to our molybdenum sales company at market-based pricing.
b. Includes $36 million ($0.03 per pound) associated with labor agreement costs at Cerro Verde.
c. Following is a reconciliation of South America mining’s 2013 unit net cash costs, excluding the Candelaria and Ojos del Salado mines:
Copper Sales Unit Net
(millions of Cash Costs
Net Cash Costs recoverable (per pound
(in millions) pounds) of copper)

Presented above $ 1,897 1,325 $

1.43
Less: Candelaria and Ojos del Salado mines 564 424
$ 1,333 901 $ 1.48

d. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

61
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Indonesia Mining Product Revenues and Production Costs

By-Product Co-Product Method

Year Ended December 31, 2015 Method Copper Gold Silvera Total
(In millions)

Revenues, excluding adjustments $ 1,735 $ 1,735 $ 1,382 $ 31 $ 3,148

Site production and delivery, before net noncash and other costs shown below 1,780 981 781 18 1,780
Gold and silver credits (1,422) — — — —
Treatment charges 231 127 101 3 231
Export duties 109 60 48 1 109
Royalty on metals 114 63 50 1 114
Net cash costs 812 1,231 980 23 2,234
Depreciation and amortization 293 161 129 3 293
Noncash and other costs, net 38 21 17 — 38
Total costs 1,143 1,413 1,126 26 2,565
Revenue adjustments, primarily for pricing on prior period open sales (50) (50) 8 1 (41)
PT Smelting intercompany profit 10 5 5 — 10
Gross profit $ 552 $ 277 $ 269 $ 6 $ 552

Copper sales (millions of recoverable pounds) 744 744

Gold sales (thousands of recoverable ounces) 1,224
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 2.33 $ 2.33 $ 1,129

Site production and delivery, before net noncash and other costs shown below 2.39 1.32 638
Gold and silver credits (1.91) — —
Treatment charges 0.31 0.17 83
Export duties 0.15 0.08 39
Royalty on metals 0.15 0.09 41
Unit net cash costs 1.09 1.66 801
Depreciation and amortization 0.39 0.22 105
Noncash and other costs, net 0.05 0.03 14
Total unit costs 1.53 1.91 920
Revenue adjustments, primarily for pricing on prior period open sales (0.07) (0.06) 7
PT Smelting intercompany profit 0.01 0.01 4
Gross profit per pound/ounce $ 0.74 $ 0.37 $ 220

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 3,148 $ 1,780 $ 293

Treatment charges (231) — —
Export duties (109) — —
Royalty on metals (114) — —
Noncash and other costs, net — 38 —
Revenue adjustments, primarily for pricing on prior period open sales (41) — —
PT Smelting intercompany profit — (10) —
Indonesia mining 2,653 1,808 293
Other mining & eliminationsb 11,229 8,527 1,386
Total mining 13,882 10,335 1,679
U.S. oil & gas operations 1,994 1,211 1,804
Corporate, other & eliminations 1 (1) 14
As reported in FCX’s consolidated financial statements $ 15,877 $ 11,545 $ 3,497

a. Includes silver sales of 2.1 million ounces ($14.81 per ounce average realized price).
b. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

62
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Indonesia Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method

Year Ended December 31, 2014 Method Copper Gold Silvera Total
(In millions)

Revenues, excluding adjustments $ 1,998 $ 1,998 $ 1,434 $ 39 $ 3,471

Site production and delivery, before net noncash and other costs shown below 1,831 1,054 757 20 1,831
Gold and silver credits (1,491) — — — —
Treatment charges 171 99 70 2 171
Export duties 77 44 32 1 77
Royalty on metals 115 66 48 1 115
Net cash costs 703 1,263 907 24 2,194
Depreciation and amortization 266 153 110 3 266
Noncash and other costs, net 191b 110 79 2 191
Total costs 1,160 1,526 1,096 29 2,651
Revenue adjustments, primarily for pricing on prior period open sales (55) (55) 18 — (37)
PT Smelting intercompany profit 34 20 14 — 34
Gross profit $ 817 $ 437 $ 370 $
1 0 $ 817
Copper sales (millions of recoverable pounds) 664 664
Gold sales (thousands of recoverable ounces) 1,168
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 3.01 $ 3.01 $ 1,229
Site production and delivery, before net noncash and other costs shown below 2.76 1.59 648
Gold and silver credits (2.25) — —
Treatment charges 0.26 0.15 61
Export duties 0.12 0.06 27
Royalty on metals 0.17 0.10 41
Unit net cash costs 1.06 1.90 777
Depreciation and amortization 0.40 0.23 94
Noncash and other costs, net 0.29b 0.17 68
Total unit costs 1.75 2.30 939
Revenue adjustments, primarily for pricing on prior period open sales (0.08) (0.08) 15
PT Smelting intercompany profit 0.05 0.03 12
Gross profit per pound/ounce $ 1.23 $ 0.66 $ 317

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 3,471 $ 1,831 $ 266

Treatment charges (171) — —
Export duties (77) — —
Royalty on metals (115) — —
Noncash and other costs, net — 191b —
Revenue adjustments, primarily for pricing on prior period open sales (37) — —
PT Smelting intercompany profit — (34) —
Indonesia mining 3,071 1,988 266
Other mining & eliminationsc 13,657 8,671 1,292
Total mining 16,728 10,659 1,558
U.S. oil & gas operations 4,710 1,237 2,291
Corporate, other & eliminations — 2 14
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863

a. Includes silver sales of 2.2 million ounces ($17.42 per ounce average realized price).
b. Includes $143 million ($0.22 per pound) of fixed costs charged directly to cost of sales as a result of the impact of export restrictions on PT-FI’s operating rates.
c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

63
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Indonesia Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method

Year Ended December 31, 2013 Method Copper Gold Silvera Total
(In millions)

Revenues, excluding adjustments $ 2,903 $ 2,903 $ 1,438 $ 61 $ 4,402

Site production and delivery, before net noncash and other costs shown below 2,174 1,434 710 30 2,174
Gold and silver credits (1,497) — — — —
Treatment charges 205 135 67 3 205
Royalty on metals 109 72 36 1 109
Net cash costs 991 1,641 813 34 2,488
Depreciation and amortization 247 163 80 4 247
Noncash and other costs, net 116 77 38 1 116
Total costs 1,354 1,881 931 39 2,851
Revenue adjustments, primarily for pricing on prior period open sales 1 1 (2) — (1)
PT Smelting intercompany loss (19) (12) (6) (1) (19)
Gross profit $ 1,531 $ 1,011 $ 499 $ 2 1 $ 1,531
Copper sales (millions of recoverable pounds) 885 885
Gold sales (thousands of recoverable ounces) 1,096
Gross profit per pound of copper/per ounce of gold:
Revenues, excluding adjustments $ 3.28 $ 3.28 $ 1,312
Site production and delivery, before net noncash and other costs shown below 2.46 1.62 648
Gold and silver credits (1.69) — —
Treatment charges 0.23 0.15 61
Royalty on metals 0.12 0.08 33
Unit net cash costs 1.12 1.85 742
Depreciation and amortization 0.28 0.19 73
Noncash and other costs, net 0.13 0.09 35
Total unit costs 1.53 2.13 850
Revenue adjustments, primarily for pricing on prior period open sales — — (1)
PT Smelting intercompany loss (0.02) (0.01) (6)
Gross profit per pound/ounce $ 1.73 $ 1.14 $ 455

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 4,402 $ 2,174 $ 247

Treatment charges (205) — —
Royalty on metals (109) — —
Noncash and other costs, net — 116 —
Revenue adjustments, primarily for pricing on prior period open sales (1) — —
PT Smelting intercompany loss — 19 —
Indonesia mining 4,087 2,309 247
Other mining & eliminationsb 14,214 8,839 1,175
Total mining 18,301 11,148 1,422
U.S. oil & gas operations 2,616 682 1,364
Corporate, other & eliminations 4 7 11
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797

a. Includes silver sales of 2.9 million ounces ($21.32 per ounce average realized price).
b. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

64
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Africa Mining Product Revenues and Production Costs

By-Product Co-Product Method
Year Ended December 31, 2015 Method Copper Cobalt Total
(In millions)

Revenues, excluding adjustmentsa $ 1,129 $ 1,129 $ 287 $ 1,416

Site production and delivery, before net noncash and other costs shown below 738 639 189 828
Cobalt creditsb (196) — — —
Royalty on metals 25 20 5 25
Net cash costs 567 659 194 853
Depreciation, depletion and amortization 257 213 44 257
Noncash and other costs, net 32c 27 5 32
Total costs 856 899 243 1,142
Revenue adjustments, primarily for pricing on prior period open sales (6) (6) (1) (7)
Gross profit $ 267 $ 224 $ 43 $ 267
Copper sales (millions of recoverable pounds) 467 467
Cobalt sales (millions of contained pounds) 35

Gross profit per pound of copper/cobalt:

Revenues, excluding adjustmentsa $ 2.42 $ 2.42 $ 8.21

Site production and delivery, before net noncash and other costs shown below 1.58 1.37 5.40
Cobalt creditsb (0.42) — —
Royalty on metals 0.05 0.04 0.14
Unit net cash costs 1.21 1.41 5.54
Depreciation, depletion and amortization 0.55 0.46 1.26
Noncash and other costs, net 0.07c 0.06 0.16
Total unit costs 1.83 1.93 6.96
Revenue adjustments, primarily for pricing on prior period open sales (0.01) (0.01) (0.02)
Gross profit per pound $ 0.58 $ 0.48 $ 1.23

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 1,416 $ 828 $ 257

Royalty on metals (25) — —
Noncash and other costs, net — 32c —
Revenue adjustments, primarily for pricing on prior period open sales (7) — —
Africa mining 1,384 860 257
Other mining & eliminationsd 12,498 9,475 1,422
Total mining 13,882 10,335 1,679
U.S. oil & gas operations 1,994 1,211 1,804
Corporate, other & eliminations 1 (1) 14
As reported in FCX’s consolidated financial statements $ 15,877 $ 11,545 $ 3,497

a. Includes point-of-sale transportation costs as negotiated in customer contracts.

b. Net of cobalt downstream processing and freight costs.
c. Includes $11 million ($0.02 per pound) for restructuring and other charges.
d. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

65
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Africa Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method
Year Ended December 31, 2014 Method Copper Cobalt Total
(In millions)

Revenues, excluding adjustmentsa $ 1,301 $ 1,301 $ 285 $ 1,586

Site production and delivery, before net noncash and other costs shown below 665 591 157 748
Cobalt creditsb (204) — — —
Royalty on metals 29 24 5 29
Net cash costs 490 615 162 777
Depreciation, depletion and amortization 228 195 33 228
Noncash and other costs, net 22 19 3 22
Total costs 740 829 198 1,027
Revenue adjustments, primarily for pricing on prior period open sales (1) (1) 2 1
Gross profit $ 560 $ 471 $ 89 $ 560
Copper sales (millions of recoverable pounds) 425 425
Cobalt sales (millions of contained pounds) 30
Gross profit per pound of copper/cobalt:
Revenues, excluding adjustmentsa $ 3.06 $ 3.06 $ 9.66
Site production and delivery, before net noncash and other costs shown below 1.56 1.39 5.30
Cobalt creditsb (0.48) — —
Royalty on metals 0.07 0.06 0.16
Unit net cash costs 1.15 1.45 5.46
Depreciation, depletion and amortization 0.54 0.46 1.13
Noncash and other costs, net 0.05 0.04 0.11
Total unit costs 1.74 1.95 6.70
Revenue adjustments, primarily for pricing on prior period open sales — — 0.07
Gross profit per pound $ 1.32 $ 1.11 $ 3.03

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 1,586 $ 748 $ 228

Royalty on metals (29) — —
Noncash and other costs, net — 22 —
Revenue adjustments, primarily for pricing on prior period open sales 1 — —
Africa mining 1,558 770 228
Other mining & eliminationsc 15,170 9,889 1,330
Total mining 16,728 10,659 1,558
U.S. oil & gas operations 4,710 1,237 2,291
Corporate, other & eliminations — 2 14
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863

a. Includes point-of-sale transportation costs as negotiated in customer contracts.

b. Net of cobalt downstream processing and freight costs.
c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

66
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Africa Mining Product Revenues and Production Costs (continued)

By-Product Co-Product Method
Year Ended December 31, 2013 Method Copper Cobalt Total
(In millions)

Revenues, excluding adjustmentsa $ 1,457 $ 1,457 $ 205 $ 1,662

Site production and delivery, before net noncash and other costs shown below 649 614 111 725
Cobalt creditsb (131) — — —
Royalty on metals 29 26 3 29
Net cash costs 547 640 114 754
Depreciation, depletion and amortization 246 220 26 246
Noncash and other costs, net 29 26 3 29
Total costs 822 886 143 1,029
Revenue adjustments, primarily for pricing on prior period open sales 2 2 2 4
Gross profit $ 637 $ 573 $ 64 $ 637
Copper sales (millions of recoverable pounds) 454 454
Cobalt sales (millions of contained pounds) 25
Gross profit per pound of copper/cobalt:
Revenues, excluding adjustmentsa $ 3.21 $ 3.21 $ 8.02
Site production and delivery, before net noncash and other costs shown below 1.43 1.35 4.35
Cobalt creditsb (0.29) — —
Royalty on metals 0.07 0.06 0.14
Unit net cash costs 1.21 1.41 4.49
Depreciation, depletion and amortization 0.54 0.48 1.00
Noncash and other costs, net 0.06 0.06 0.11
Total unit costs 1.81 1.95 5.60
Revenue adjustments, primarily for pricing on prior period open sales — — 0.09
Gross profit per pound $ 1.40 $ 1.26 $ 2.51

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 1,662 $ 725 $ 246

Royalty on metals (29) — —
Noncash and other costs, net — 29 —
Revenue adjustments, primarily for pricing on prior period open sales 4 — —
Africa mining 1,637 754 246
Other mining & eliminationsc 16,664 10,394 1,176
Total mining 18,301 11,148 1,422
U.S. oil & gas operations 2,616 682 1,364
Corporate, other & eliminations 4 7 11
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797

a. Includes point-of-sale transportation costs as negotiated in customer contracts.

b. Net of cobalt downstream processing and freight costs.
c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16.

67
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

Molybdenum Mines Product Revenues and Production Costs

Years Ended December 31, 2015 2014 2013

(In millions)

Revenues, excluding adjustmentsa $ 388 $ 630 $ 566

Site production and delivery, before net noncash and other costs shown below 299 321 303
Treatment charges and other 40 43 44
Net cash costs 339 364 347
Depreciation, depletion and amortization 97 92 82
Molybdenum inventory adjustments 11 — —
Noncash and other costs, net 13b 7 14
Total costs 460 463 443
Gross (loss) profit $ (72) $ 167 $ 123
Molybdenum sales (millions of recoverable pounds)a 48 51 49
Gross (loss) profit per pound of molybdenum:
Revenues, excluding adjustmentsa $ 8.14 $ 12.28 $ 11.65
Site production and delivery, before net noncash and other costs shown below 6.27 6.24 6.24
Treatment charges and other 0.84 0.84 0.91
Unit net cash costs 7.11 7.08 7.15
Depreciation, depletion and amortization 2.04 1.80 1.68
Molybdenum inventory adjustments 0.22 — —
Noncash and other costs, net 0.28b 0.15 0.29
Total unit costs 9.65 9.03 9.12
Gross (loss) profit per pound $ (1.51) $ 3.25 $ 2.53

Reconciliation to Amounts Reported

Copper and
Depreciation,
Molybdenum
Production Depletion and Inventory
Revenues
and Delivery Amortization
Adjustments
(In millions)

Year Ended December 31, 2015

Totals presented above $ 388 $ 299 $ 97 $ 11
Treatment charges and other (40) — — —
b
Noncash and other costs, net — 13 — —
Molybdenum mines 348 312 97 11
Other mining & eliminationsc 13,534 10,023 1,582 327
Total mining 13,882 10,335 1,679 338
U.S. oil & gas operations 1,994 1,211 1,804 —
Corporate, other & eliminations 1 (1) 14 —
As reported in FCX’s consolidated financial statements $ 15,877 $ 11,545 $ 3,497 $ 338
Year Ended December 31, 2014
Totals presented above $ 630 $ 321 $ 92 $ —
Treatment charges and other (43) — — —
Noncash and other costs, net — 7 — —
Molybdenum mines 587 328 92 —
Other mining & eliminationsc 16,141 10,331 1,466 6
Total mining 16,728 10,659 1,558 6
U.S. oil & gas operations 4,710 1,237 2,291 —
Corporate, other & eliminations — 2 14 —
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863 $ 6
Year Ended December 31, 2013
Totals presented above $ 566 $ 303 $ 82 $ —
Treatment charges and other (44) — — —
Noncash and other costs, net — 14 — —
Molybdenum mines 522 317 82 —
Other mining & eliminationsc 17,779 10,831 1,340 3
Total mining 18,301 11,148 1,422 3
U.S. oil & gas operations 2,616 682 1,364 —
Corporate, other & eliminations 4 7 11 —
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797 $ 3

a. Reflects sales of the molybdenum mines’ production to the molybdenum sales company at market-based pricing. On a consolidated basis, realizations are based on the actual contract
terms for sales to third parties; as a result, the consolidated average realized price per pound of molybdenum will differ from the amounts reported in this table.
b. Includes $7 million ($0.15 per pound) for restructuring and other charges.
c. Represents the combined total for all other mining operations and the related eliminations, as presented in Note 16. Also includes amounts associated with the molybdenum sales
company, which includes sales of molybdenum produced by the molybdenum mines and by certain of the North and South America copper mines.

68
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

U.S. Oil & Gas Product Revenues, Cash Production Costs and Realizations
Total U.S.
Year Ended December 31, 2015 Oil Natural Gas NGLs Oil & Gas
(In millions)

Oil and gas revenues before derivatives $ 1,607 $ 232 $ 46 $ 1,885

Cash gains on derivative contracts 406 — — 406
Realized revenues $ 2,013 $ 232 $ 46 2,291
Less: cash production costs 979
Cash operating margin 1,312
Less: depreciation, depletion and amortization 1,804
Less: impairment of oil and gas properties 12,980
Less: accretion and other costs 232a
Plus: net noncash mark-to-market losses on derivative contracts (319)
Plus: other net adjustments 22
Gross loss $ (14,001)

Oil (MMBbls) 35.3

Gas (Bcf) 89.7
NGLs (MMBbls) 2.4
Oil Equivalents (MMBOE) 52.6

Oil Natural Gas NGLs

(per barrel) (per MMBtu) (per barrel) Per BOE

Oil and gas revenues before derivatives $ 45.58 $ 2.59 $ 18.90 $ 35.82
Cash gains on derivative contracts 11.53 — — 7.72
Realized revenues $ 57.11 $ 2.59 $ 18.90 43.54
Less: cash production costs 18.59
Cash operating margin 24.95
Less: depreciation, depletion and amortization 34.28
Less: impairment of oil and gas properties 246.67
Less: accretion and other costs 4.41a
Plus: net noncash mark-to-market losses on derivative contracts (6.07)
Plus: other net adjustments 0.43
Gross loss $ (266.05)

Reconciliation to Amounts Reported

Depreciation, Impairment of
Production Depletion and Oil and Gas
Revenues
and Delivery Amortization Properties
(In millions)

Totals presented above $ 1,885 $ 979 $ 1,804 $ 12,980

Cash gains on derivative contracts 406 — — —
Net noncash mark-to-market losses on derivative contracts (319) — — —
Accretion and other costs — 232a — —
Other net adjustments 22 — — —
U.S. oil & gas operations 1,994 1,211 1,804 12,980
Total miningb 13,882 10,335 1,679 —
Corporate, other & eliminations 1 (1) 14 164c
As reported in FCX’s consolidated financial statements $ 15,877 $ 11,545 $ 3,497 $ 13,144

a. Includes $188 million ($3.58 per BOE) primarily for other asset impairments and inventory write-downs, idle/terminated rig costs and prior year non-income tax assessments at the
California properties.
b. Represents the combined total for mining operations and the related eliminations, as presented in Note 16.
c. Reflects impairment charges for international oil and gas properties, primarily related to Morocco.

69
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

U.S. Oil & Gas Product Revenues, Cash Production Costs and Realizations (continued)
Total U.S.
Year Ended December 31, 2014 Oil Natural Gas NGLs Oil & Gas
(In millions)

Oil and gas revenues before derivatives $ 3,721 $ 353 $ 128 $ 4,202
Cash losses on derivative contracts (111) (11) — (122)
Realized revenues $ 3,610 $ 342 $ 128 4,080
Less: cash production costs 1,140a
Cash operating margin 2,940
Less: depreciation, depletion and amortization 2,291
Less: impairment of oil and gas properties 3,737
Less: accretion and other costs 97b
Plus: net noncash mark-to-market gains on derivative contracts 627
Plus: other net adjustments 3
Gross loss $ (2,555)
Oil (MMBbls) 40.1
Gas (Bcf) 80.8
NGLs (MMBbls) 3.2
Oil Equivalents (MMBOE) 56.8a

Oil Natural Gas NGLs

(per barrel) (per MMBtu) (per barrel) Per BOE
Oil and gas revenues before derivatives $ 92.76 $ 4.37 $ 39.73 $ 73.98
Cash losses on derivative contracts (2.76) (0.14) — (2.15)
Realized revenues $ 90.00 $ 4.23 $ 39.73 71.83
Less: cash production costs 20.08a
Cash operating margin 51.75
Less: depreciation, depletion and amortization 40.34
Less: impairment of oil and gas properties 65.80
Less: accretion and other costs 1.69b
Plus: net noncash mark-to-market gains on derivative contracts 11.03
Plus: other net adjustments 0.06
Gross loss $ (44.99)

Reconciliation to Amounts Reported

Depreciation, Impairment of
Production Depletion and Oil and Gas
Revenues
and Delivery Amortization Properties
(In millions)

Totals presented above $ 4,202 $ 1,140 $ 2,291 $ 3,737

Cash losses on derivative contracts (122) — — —
Net noncash mark-to-market gains on derivative contracts 627 — — —
Accretion and other costs — 97b — —
Other net adjustments 3 — — —
U.S. oil & gas operations 4,710 1,237 2,291 3,737
Total miningc 16,728 10,659 1,558 —
Corporate, other & eliminations — 2 14 —
As reported in FCX’s consolidated financial statements $ 21,438 $ 11,898 $ 3,863 $ 3,737

a. Following is a reconciliation of FM O&G’s cash production costs per BOE for 2014 unit net cash costs, excluding Eagle Ford:
Cash Cash
Production Oil Equivalents Production
Costs (in millions) (MMBOE) Costs Per BOE
Presented above $ 1,140 56.8 $ 20.08
Less: Eagle Ford 113 8.7 12.97
$ 1,027 48.1 $ 21.36

b. Includes $46 million ($0.81 per BOE) primarily for idle/terminated rig costs and inventory write-downs.
c. Represents the combined total for mining operations and the related eliminations, as presented in Note 16.

70
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

U.S. Oil & Gas Product Revenues, Cash Production Costs and Realizations (continued)
Total U.S.
Seven Months from June 1, 2013, to December 31, 2013 Oil Natural Gas NGLs Oil & Gas
(In millions)

Oil and gas revenues before derivatives $ 2,655 $ 202 $ 92 $ 2,949

Cash (losses) gains on derivative contracts (36) 14 — (22)
Realized revenues $ 2,619 $ 216 $ 92 2,927
Less: cash production costs 653a
Cash operating margin 2,274
Less: depreciation, depletion and amortization 1,364
Less: accretion and other costs 29
Plus: net noncash mark-to-market losses on derivative contracts (312)
Plus: other net adjustments 1
Gross profit $ 570
Oil (MMBbls) 26.6
Gas (Bcf) 54.2
NGLs (MMBbls) 2.4
Oil Equivalents (MMBOE) 38.1a

Oil Natural Gas NGLs

(per barrel) (per MMBtu) (per barrel) Per BOE
Oil and gas revenues before derivatives $ 99.67 $ 3.73 $ 38.20 $ 77.45
Cash (losses) gains on derivative contracts (1.35) 0.26 — (0.58)
Realized revenues $ 98.32 $ 3.99 $ 38.20 76.87
Less: cash production costs 17.14a
Cash operating margin 59.73
Less: depreciation, depletion and amortization 35.81
Less: accretion and other costs 0.79
Plus: net noncash mark-to-market losses on derivative contracts (8.20)
Plus: other net adjustments 0.04
Gross profit $ 14.97

Reconciliation to Amounts Reported

Depreciation,
Production Depletion and
Revenues and Delivery Amortization
(In millions)

Totals presented above $ 2,949 $ 653 $ 1,364

Cash losses on derivative contracts (22) — —
Net noncash mark-to-market losses on derivative contracts (312) — —
Accretion and other costs — 29 —
Other net adjustments 1 — —
U.S. oil & gas operations 2,616 682 1,364
Total miningb 18,301 11,148 1,422
Corporate, other & eliminations 4 7 11
As reported in FCX’s consolidated financial statements $ 20,921 $ 11,837 $ 2,797

a. Following is a reconciliation of FM O&G’s cash production costs per BOE for 2013 unit net cash costs, excluding Eagle Ford:
Cash Cash
Production Oil Equivalents Production
Costs (in millions) (MMBOE) Costs Per BOE
Presented above $ 653 38.1 $ 17.14
Less: Eagle Ford 119 9.9 11.97
$ 534 28.2 $ 18.95

b. Represents the combined total for all mining operations and the related eliminations, as presented in Note 16.

71
 MANAGEMENT’S DISCUSSION
AND ANALYSIS

CAUTIONARY STATEMENT effects of cost and capital expenditure reductions and production

Our discussion and analysis contains forward-looking statements curtailments on financial results and cash flow; the outcome

in which we discuss factors we believe may affect our future of our strategic review of our oil and gas business; the outcome of

performance. Forward-looking statements are all statements other our debt reduction initiatives; potential additional oil and gas

than statements of historical facts, such as projections or property impairment charges; potential inventory adjustments;

expectations relating to ore grades and milling rates; production potential impairment of long-lived mining assets; the outcome of

and sales volumes; unit net cash costs; cash production costs per ongoing discussions with the Indonesian government regarding

BOE; operating cash flows; capital expenditures; debt reduction PT-FI’s COW; PT-FI’s ability to obtain renewal of its export permit

initiatives; exploration efforts and results; development and after August 8, 2016; the potential effects of violence in Indonesia

production activities and costs; liquidity; tax rates; the impact of generally and in the province of Papua; the resolution of

copper, gold, molybdenum, cobalt, crude oil and natural gas administrative disputes in the DRC; industry risks; regulatory

price changes; the impact of deferred intercompany profits on changes; political risks; weather- and climate-related risks; labor

earnings; reserve estimates; future dividend payments; and relations; environmental risks; litigation results; and other factors

share purchases and sales. The words “anticipates,” “may,” “can,” described in more detail in Part I, Item 1A. “Risk Factors” of our

“plans,” “believes,” “potential,” “estimates,” “expects,” “projects,” annual report on Form 10-K for the year ended December 31, 2015.

“targets,” “intends,” “likely,” “will,” “should,” “to be” and any Investors are cautioned that many of the assumptions upon

similar expressions are intended to identify those assertions as which our forward-looking statements are based are likely to

forward-looking statements. The declaration of dividends is at change after the forward-looking statements are made, including,

the discretion of the Board and will depend on our financial results, for example, commodity prices, which we cannot control, and

cash requirements, future prospects, and other factors deemed production volumes and costs, some aspects of which we may

relevant by the Board. not be able to control. Further, we may make changes to our

We caution readers that forward-looking statements are not business plans that could affect our results. We caution investors

guarantees of future performance and actual results may differ that we do not intend to update forward-looking statements

materially from those anticipated, projected or assumed in the more frequently than quarterly notwithstanding any changes in

forward-looking statements. Important factors that can cause our our assumptions, changes in business plans, actual experience

actual results to differ materially from those anticipated in the or other changes, and we undertake no obligation to update any

forward-looking statements include supply of, demand for, and forward-looking statements.

prices of copper, gold, molybdenum, cobalt, crude oil and natural

gas; mine sequencing; production rates; drilling results; potential

72

Freeport-McMoRan Inc.’s (the Company’s) management is
responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) under the
Securities Exchange Act of 1934 as a process designed by, or
under the supervision of, the Company’s principal executive and
principal financial officers and effected by the Company’s Board
of Directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of
the Company’s assets;
• Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and
directors of the Company; and
• Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the
financial statements.
MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections
of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Our management, including our principal executive officer and
principal financial officer, assessed the effectiveness of our
internal control over financial reporting as of the end of the fiscal
year covered by this annual report on Form 10-K. In making
this assessment, our management used the criteria set forth in
Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission
(2013 framework) (the COSO criteria). Based on our management’s
assessment, management concluded that, as of December 31, 2015,
our Company’s internal control over financial reporting is effective
based on the COSO criteria.
Ernst & Young LLP, an independent registered public accounting
firm, who audited the Company’s consolidated financial
statements included in this Form 10-K, has issued an attestation
report on the Company’s internal control over financial reporting,
which is included herein.
Richard C. Adkerson Kathleen L. Quirk
Vice Chairman of the Board, Executive Vice President,
President and Chief Financial Officer and
Chief Executive Officer Treasurer
73
 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
FREEPORT-M c M oR an INC.
We have audited Freeport-McMoRan Inc.’s internal control over
financial reporting as of December 31, 2015, based on criteria
established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). Freeport-
McMoRan Inc.’s management is responsible for maintaining
effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial
reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is
to express an opinion on the Company’s internal control over
financial reporting based on our audit.
We conducted our audit in accordance with the standards of
the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
74
dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in
accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. 
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, Freeport-McMoRan Inc. maintained, in all
material respects, effective internal control over financial
reporting as of December 31, 2015, based on the COSO criteria.
We also have audited, in accordance with the standards of
the Public Company Accounting Oversight Board (United States),
the consolidated balance sheets of Freeport-McMoRan Inc.
as of December 31, 2015 and 2014, and the related consolidated
statements of operations, comprehensive (loss) income, equity
and cash flows for each of the three years in the period ended
December 31, 2015, and our report dated February 26, 2016
expressed an unqualified opinion thereon.
ERNST & YOUNG LLP
Phoenix, Arizona
February 26, 2016

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
FREEPORT-M c M oR an INC.
We have audited the accompanying consolidated balance sheets
of Freeport-McMoRan Inc. as of December 31, 2015 and 2014, and
the related consolidated statements of operations, comprehensive
(loss) income, equity and cash flows for each of the three years
in the period ended December 31, 2015. These financial statements
are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Freeport-McMoRan Inc. at December 31, 2015
and 2014, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended
December 31, 2015, in conformity with U.S. generally accepted
accounting principles.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States),
Freeport-McMoRan Inc.’s internal control over financial reporting
as of December 31, 2015, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013
framework) and our report dated February 26, 2016 expressed an
unqualified opinion thereon.
ERNST & YOUNG LLP
Phoenix, Arizona
February 26, 2016
75
 CONSOLIDATED STATEMENTS
OF OPERATIONS

Years Ended December 31, 2015 2014 2013

(In millions, except per share amounts)

Revenues $ 15,877 $ 21,438 $ 20,921

Cost of sales:
Production and delivery 11,545 11,898 11,837
Depreciation, depletion and amortization 3,497 3,863 2,797
Impairment of oil and gas properties 13,144 3,737 —
Copper and molybdenum inventory adjustments 338 6 3
Total cost of sales 28,524 19,504 14,637
Selling, general and administrative expenses 569 592 657
Mining exploration and research expenses 127 126 210
Environmental obligations and shutdown costs 78 119 66
Goodwill impairment — 1,717 —
Net gain on sales of assets (39) (717) —
Total costs and expenses 29,259 21,341 15,570
Operating (loss) income (13,382) 97 5,351
Interest expense, net (645) (630) (518)
Net gain (loss) on early extinguishment of debt — 73 (35)
Gain on investment in McMoRan Exploration Co. (MMR) — — 128
Other income (expense), net 6 36 (13)
(Loss) income before income taxes and equity in affiliated companies’ net (losses) earnings (14,021) (424) 4,913
Benefit from (provision for) income taxes 1,935 (324) (1,475)
Equity in affiliated companies’ net (losses) earnings (3) 3 3
Net (loss) income (12,089) (745) 3,441
Net income attributable to noncontrolling interests (106) (523) (761)
Preferred dividends attributable to redeemable noncontrolling interest (41) (40) (22)
Net (loss) income attributable to common stockholders $ (12,236) $ (1,308) $ 2,658
Net (loss) income per share attributable to common stockholders:
Basic $ (11.31) $ (1.26) $ 2.65
Diluted $ (11.31) $ (1.26) $ 2.64
Weighted-average common shares outstanding:
Basic 1,082 1,039 1,002
Diluted 1,082 1,039 1,006

Dividends declared per share of common stock $ 0.2605 $ 1.25 $ 2.25

The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

76
 CONSOLIDATED STATEMENTS
OF COMPREHENSIVE (LOSS) INCOME

Years Ended December 31, 2015 2014 2013

(In millions)

Net (loss) income $ (12,089) $ (745) $ 3,441

Other comprehensive income (loss), net of taxes:
Defined benefit plans:
Actuarial (losses) gains arising during the period (5) (166) 73
Prior service costs arising during the period — — (21)
Amortization of unrecognized amounts included in net periodic benefit costs 38 25 30
Foreign exchange gains 8 1 12
Translation adjustments and unrealized losses on securities — (1) 4
Other comprehensive income (loss) 41 (141) 98

Total comprehensive (loss) income (12,048) (886) 3,539

Total comprehensive income attributable to noncontrolling interests (106) (521) (758)
Preferred dividends attributable to redeemable noncontrolling interest (41) (40) (22)
Total comprehensive (loss) income attributable to common stockholders $ (12,195) $ (1,447) $ 2,759

The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

77
 CONSOLIDATED STATEMENTS
OF CASH FLOWS

Years Ended December 31, 2015 2014 2013

(In millions)

Cash flow from operating activities:

Net (loss) income $ (12,089) $ (745) $ 3,441
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and amortization 3,497 3,863 2,797
Impairment of oil and gas properties and goodwill 13,144 5,454 —
Copper and molybdenum inventory adjustments 338 6 3
Other asset impairments, inventory write-downs, restructuring and other 256 18 —
Net gain on sales of assets (39) (717) —
Net (gains) losses on crude oil and natural gas derivative contracts (87) (504) 334
Gain on investment in MMR — — (128)
Stock-based compensation 85 106 173
Net charges for environmental and asset retirement obligations, including accretion 209 200 164
Payments for environmental and asset retirement obligations (198) (176) (237)
Net (gain) loss on early extinguishment of debt — (73) 35
Deferred income taxes (2,039) (929) 277
Increase in long-term mill and leach stockpiles (212) (233) (431)
Other, net (18) (7) 88
Changes in working capital and other tax payments,
excluding amounts from acquisitions and dispositions:
Accounts receivable 813 215 49
Inventories 379 (249) (288)
Other current assets 97 — 26
Accounts payable and accrued liabilities (217) (394) (359)
Accrued income taxes and changes in other tax payments (699) (204) 195
Net cash provided by operating activities 3,220 5,631 6,139

Cash flow from investing activities:
Capital expenditures:
North America copper mines (355) (969) (1,066)
South America (1,722) (1,785) (1,145)
Indonesia (913) (948) (1,030)
Africa (229) (159) (205)
Molybdenum mines (13) (54) (164)
United States oil and gas operations (2,948) (3,205) (1,436)
Other (173) (95) (240)
Acquisitions of Deepwater Gulf of Mexico interests — (1,426) —
Acquisition of Plains Exploration & Production Company, net of cash acquired — — (3,465)
Acquisition of MMR, net of cash acquired — — (1,628)
Acquisition of cobalt chemical business, net of cash acquired — — (348)
Net proceeds from sale of Candelaria and Ojos del Salado — 1,709 —
Net proceeds from sale of Eagle Ford shale assets — 2,910 —
Other, net 107 221 (181)
Net cash used in investing activities (6,246) (3,801) (10,908)

Cash flow from financing activities:

Proceeds from debt 8,272 8,710 11,501
Repayments of debt (6,677) (10,306) (5,476)
Net proceeds from sale of common stock 1,936 — —
Redemption of MMR preferred stock — — (228)
Cash dividends and distributions paid:
Common stock (605) (1,305) (2,281)
Noncontrolling interests (120) (424) (256)
Stock-based awards net (payments) proceeds, including excess tax benefit (4) 9 (98)
Debt financing costs and other, net (16) (35) (113)
Net cash provided by (used in) financing activities 2,786 (3,351) 3,049
Net decrease in cash and cash equivalents (240) (1,521) (1,720)
Cash and cash equivalents at beginning of year 464 1,985 3,705
Cash and cash equivalents at end of year $ 224 $ 464 $ 1,985

The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

78
 CONSOLIDATED BALANCE
SHEETS

December 31, 2015 2014

(In millions, except par value)

ASSETS
Current assets:
Cash and cash equivalents $ 224 $ 464
Trade accounts receivable 689 953
Income and other tax receivables 1,414 1,322
Other accounts receivable 174 288
Inventories:
Materials and supplies, net 1,869 1,886
Mill and leach stockpiles 1,724 1,914
Product 1,195 1,561
Other current assets 173 657
Total current assets 7,462 9,045
Property, plant, equipment and mining development costs, net 27,509 26,220
Oil and gas properties, net – full cost method:
Subject to amortization, less accumulated amortization and impairment of $22,276 and $7,360, respectively 2,262 9,187
Not subject to amortization 4,831 10,087
Long-term mill and leach stockpiles 2,271 2,179
Other assets 2,242 1,956
Total assets $ 46,577 $ 58,674
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 3,355 $ 3,653
Current portion of debt 649 478
Current portion of environmental and asset retirement obligations 272 296
Accrued income taxes 23 410
Dividends payable 8 335
Total current liabilities 4,307 5,172
Long-term debt, less current portion 19,779 18,371
Deferred income taxes 4,288 6,398
Environmental and asset retirement obligations, less current portion 3,739 3,647
Other liabilities 1,656 1,861
Total liabilities 33,769 35,449

Redeemable noncontrolling interest 764 751

Equity:
Stockholders’ equity:
Common stock, par value $0.10, 1,374 shares and 1,167 shares issued, respectively 137 117
Capital in excess of par value 24,283 22,281
(Accumulated deficit) retained earnings (12,387) 128
Accumulated other comprehensive loss (503) (544)
Common stock held in treasury – 128 shares at cost (3,702) (3,695)
Total stockholders’ equity 7,828 18,287
Noncontrolling interests 4,216 4,187
Total equity 12,044 22,474
Total liabilities and equity $ 46,577 $ 58,674

The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

79
 CONSOLIDATED STATEMENTS
OF EQUITY

Stockholders’ Equity

Common Stock
(Accumulated Accumulated Held in Treasury
Common Stock
Capital in Deficit) Other Total
Number of At Par Excess of Retained Comprehensive Number Stockholders’ Noncontrolling Total
Shares Value Par Value Earnings Loss of Shares At Cost Equity Interests Equity
(In millions)

Balance at January 1, 2013 1,073 $ 107 $ 19,119 $ 2,399 $ (506) 124 $ (3,576) $ 17,543 $ 3,768 $ 21,311
Common stock issued to acquire Plains Exploration
& Production Company 91 9 2,822 — — — — 2,831 — 2,831
Exchange of employee stock-based awards in connection
with acquisitions — — 67 — — — — 67 — 67
Exercised and issued stock-based awards 1 1 8 — — — — 9 — 9
Stock-based compensation — — 153 — — — — 153 — 153
Reserve of tax benefit for stock-based awards — — (1) — — — — (1) — (1)
Tender of shares for stock-based awards — — — — — 3 (105) (105) — (105)
Dividends on common stock — — — (2,315) — — — (2,315) — (2,315)
Dividends to noncontrolling interests — — — — — — — — (236) (236)
Noncontrolling interests’ share of contributed
capital in subsidiary — — (7) — — — — (7) 7 —
Net income attributable to common stockholders — — — 2,658 — — — 2,658 — 2,658
Net income attributable to noncontrolling interests — — — — — — — — 761 761
Other comprehensive income (loss) — — — — 101 — — 101 (3) 98

Balance at December 31, 2013 1,165 117 22,161 2,742 (405) 127 (3,681) 20,934 4,297 25,231
Exercised and issued stock-based awards 2 — 12 — — — — 12 — 12
Stock-based compensation — — 98 — — — — 98 — 98
Tax benefit for stock-based awards — — 5 — — — — 5 1 6
Tender of shares for stock-based awards — — 6 — — 1 (14) (8) — (8)
Dividends on common stock — — — (1,306) — — — (1,306) — (1,306)
Dividends to noncontrolling interests — — — — — — — — (396) (396)
Noncontrolling interests’ share of contributed
capital in subsidiary — — (1) — — — — (1) 7 6
Sale of Candelaria and Ojos del Salado mines — — — — — — — — (243) (243)
Net loss attributable to common stockholders — — — (1,308) — — — (1,308) — (1,308)
Net income attributable to noncontrolling interests — — — — — — — — 523 523
Other comprehensive loss — — — — (139) — — (139) (2) (141)

Balance at December 31, 2014 1,167 117 22,281 128 (544) 128 (3,695) 18,287 4,187 22,474
Sale of common stock 206 20 1,916 — — — — 1,936 — 1,936
Exercised and issued stock-based awards 1 — 3 — — — — 3 — 3
Stock-based compensation — — 91 — — — — 91 7 98
Reserve on tax benefit for stock-based awards — — (1) — — — — (1) — (1)
Tender of shares for stock-based awards — — — — — — (7) (7) — (7)
Dividends on common stock — — — (279) — — — (279) — (279)
Dividends to noncontrolling interests — — — — — — — — (91) (91)
Noncontrolling interests’ share of contributed
capital in subsidiary — — (7) — — — — (7) 7 —
Net loss attributable to common stockholders — — — (12,236) — — — (12,236) — (12,236)
Net income attributable to noncontrolling interests — — — — — — — — 106 106
Other comprehensive income — — — — 41 — — 41 — 41
Balance at December 31, 2015 1,374 $ 137 $
24,283 $
(12,387) $
(503)
128 $
(3,702) $
7,828 $
4,216 $
12,044

The accompanying Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

80

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. Effective July 14, 2014, Freeport-McMoRan
Copper & Gold Inc. changed its name to Freeport-McMoRan Inc.
(FCX). The consolidated financial statements of FCX include the
accounts of those subsidiaries where it directly or indirectly has
more than 50 percent of the voting rights and has the right to
control significant management decisions. The most significant
entities that FCX consolidates include its 90.64 percent-owned
subsidiary PT Freeport Indonesia (PT-FI), and the following wholly
owned subsidiaries: Freeport Minerals Corporation (FMC,
formerly Freeport-McMoRan Corporation), Atlantic Copper, S.L.U.
(Atlantic Copper) and FCX Oil & Gas Inc. (FM O&G).
FCX acquired mining assets in North America, South America
and Africa when it acquired Phelps Dodge Corporation (now
known as FMC) in 2007. FCX acquired oil and gas operations when
it acquired Plains Exploration & Production Company (PXP) and
McMoRan Exploration Co. (MMR), collectively known as FM O&G,
on May 31, 2013, and June 3, 2013, respectively. The results
included in these financial statements for the year ended
December 31, 2013, include PXP’s results beginning June 1, 2013,
and MMR’s results beginning June 4, 2013 (refer to Note 2 for
further discussion).
FCX’s unincorporated joint ventures with Rio Tinto plc (Rio
Tinto) and Sumitomo Metal Mining Arizona, Inc. (Sumitomo) are
reflected using the proportionate consolidation method (refer
to Note 3 for further discussion). Investments in unconsolidated
companies owned 20 percent or more are recorded using
the equity method. Investments in companies owned less than
20 percent, and for which FCX does not exercise significant
influence, are carried at cost. All significant intercompany
transactions have been eliminated. Dollar amounts in tables are
stated in millions, except per share amounts.
Business Segments. FCX has organized its mining operations
into five primary divisions — North America copper mines, South
America mining, Indonesia mining, Africa mining and Molybdenum
mines, and operating segments that meet certain thresholds are
reportable segments. For oil and gas operations, FCX determines
its operating segments on a country-by-country basis. FCX’s
reportable segments include the Morenci, Cerro Verde, Grasberg
and Tenke Fungurume copper mines, the Rod & Refining
operations and the United States (U.S.) Oil & Gas operations.
Refer to Note 16 for further discussion.
Use of Estimates. The preparation of FCX’s financial statements
in conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions
that affect the amounts reported in these financial statements and
accompanying notes. The more significant areas requiring the
use of management estimates include reserve estimation
(minerals, and oil and natural gas); timing of transfers of oil and
gas properties not subject to amortization into the full cost pool;
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
asset lives for depreciation, depletion and amortization;
environmental obligations; asset retirement obligations; estimates
of recoverable copper in mill and leach stockpiles; deferred
taxes and valuation allowances; reserves for contingencies and
litigation; asset impairment, including estimates used to derive
future cash flows associated with those assets; determination of
fair value of assets acquired, liabilities assumed and redeemable
noncontrolling interest, and recognition of goodwill and deferred
taxes in connection with business combinations; pension
benefits; and valuation of derivative instruments. Actual results
could differ from those estimates.
Functional Currency. The functional currency for the majority of
FCX’s foreign operations is the U.S. dollar. For foreign subsidiaries
whose functional currency is the U.S. dollar, monetary assets and
liabilities denominated in the local currency are translated at
current exchange rates, and non-monetary assets and liabilities,
such as inventories, property, plant, equipment and development
costs, are translated at historical rates. Gains and losses resulting
from translation of such account balances are included in other
income (expense), as are gains and losses from foreign currency
transactions. Foreign currency losses totaled $93 million in 2015,
$4 million in 2014 and $36 million in 2013.
Cash Equivalents. Highly liquid investments purchased with
maturities of three months or less are considered cash equivalents.
Inventories. Inventories include mill and leach stockpiles,
materials and supplies, and product inventories. Beginning in
third-quarter 2015, inventories are stated at the lower of weighted-
average cost or net realizable value. Prior to third-quarter 2015,
inventories were stated at the lower of weighted-average cost or
market (refer to “New Accounting Standards” in this note for
discussion of the change in accounting principle). Refer to Note 4
for further discussion.
Mill and Leach Stockpiles. Mill and leach stockpiles are
work-in-process inventories for FCX’s mining operations. Mill and
leach stockpiles have been extracted from an ore body and are
available for copper recovery. Mill stockpiles contain sulfide ores,
and recovery of metal is through milling, concentrating, smelting
and refining or, alternatively, by concentrate leaching. Leach
stockpiles contain oxide ores and certain secondary sulfide ores,
and recovery of metal is through exposure to acidic solutions that
dissolve contained copper and deliver it in solution to extraction
processing facilities (i.e., solution extraction and electrowinning
(SX/EW)). The recorded cost of mill and leach stockpiles includes
mining and haulage costs incurred to deliver ore to stockpiles,
depreciation, depletion, amortization and site overhead costs.
Material is removed from the stockpiles at a weighted-average
cost per pound.
81
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Because it is generally impracticable to determine copper
contained in mill and leach stockpiles by physical count, reasonable
estimation methods are employed. The quantity of material
delivered to mill and leach stockpiles is based on surveyed volumes
of mined material and daily production records. Sampling and
assaying of blasthole cuttings determine the estimated copper
grade of the material delivered to mill and leach stockpiles.
Expected copper recovery rates for mill stockpiles are determined
by metallurgical testing. The recoverable copper in mill stockpiles,
once entered into the production process, can be produced into
copper concentrate almost immediately.
Expected copper recovery rates for leach stockpiles are
determined using small-scale laboratory tests, small- to large-scale
column testing (which simulates the production process), historical
trends and other factors, including mineralogy of the ore and rock
type. Total copper recovery in leach stockpiles can vary significantly
from a low percentage to more than 90 percent depending on
several variables, including processing methodology, processing
variables, mineralogy and particle size of the rock. For newly placed
material on active stockpiles, as much as 80 percent total copper
recovery may occur during the first year, and the remaining copper
may be recovered over many years.
Processes and recovery rates for mill and leach stockpiles are
monitored regularly, and recovery rate estimates are adjusted
periodically as additional information becomes available and as
related technology changes. Adjustments to recovery rates will
typically result in a future impact to the value of the material
removed from the stockpiles at a revised weighted-average cost
per pound of recoverable copper.
Product Inventories. Product inventories include raw materials,
work-in-process and finished goods. Raw materials are primarily
unprocessed concentrate at Atlantic Copper’s smelting and
refining operations. Work-in-process inventories are primarily
copper concentrate at various stages of conversion into anode
and cathode at Atlantic Copper’s operations. Atlantic Copper’s
in-process inventories are valued at the weighted-average cost of
the material fed to the smelting and refining process plus
in-process conversion costs. Finished goods for mining operations
represent salable products (e.g., copper and molybdenum
concentrate, copper anode, copper cathode, copper rod, copper
wire, molybdenum oxide, high-purity molybdenum chemicals and
other metallurgical products, and various cobalt products).
Finished goods are valued based on the weighted-average cost of
source material plus applicable conversion costs relating to
associated process facilities. Costs of finished goods and
work-in-process (i.e., not raw materials) inventories include labor
and benefits, supplies, energy, depreciation, depletion,
amortization, site overhead costs and other necessary costs
associated with the extraction and processing of ore, including,
depending on the process, mining, haulage, milling, concentrating,
82
smelting, leaching, solution extraction, refining, roasting and
chemical processing. Corporate general and administrative costs
are not included in inventory costs.
Property, Plant, Equipment and Mining Development Costs.
Property, plant, equipment and mining development costs are
carried at cost. Mineral exploration costs, as well as drilling and
other costs incurred for the purpose of converting mineral
resources to proven and probable reserves or identifying new
mineral resources at development or production stage properties,
are charged to expense as incurred. Development costs are
capitalized beginning after proven and probable mineral reserves
have been established. Development costs include costs incurred
resulting from mine pre-production activities undertaken to gain
access to proven and probable reserves, including shafts, adits,
drifts, ramps, permanent excavations, infrastructure and removal
of overburden. Additionally, interest expense allocable to the
cost of developing mining properties and to constructing new
facilities is capitalized until assets are ready for their intended use.
Expenditures for replacements and improvements are
capitalized. Costs related to periodic scheduled maintenance
(i.e., turnarounds) are charged to expense as incurred. Depreciation
for mining and milling life-of-mine assets, infrastructure and
other common costs is determined using the unit-of-production
(UOP) method based on total estimated recoverable proven and
probable copper reserves (for primary copper mines) and proven
and probable molybdenum reserves (for primary molybdenum
mines). Development costs and acquisition costs for proven and
probable mineral reserves that relate to a specific ore body are
depreciated using the UOP method based on estimated recoverable
proven and probable mineral reserves for the ore body benefited.
Depreciation, depletion and amortization using the UOP method
is recorded upon extraction of the recoverable copper or
molybdenum from the ore body, at which time it is allocated to
inventory cost and then included as a component of cost of goods
sold. Other assets are depreciated on a straight-line basis over
estimated useful lives of up to 39 years for buildings and three to
25 years for machinery and equipment, and mobile equipment.
Included in property, plant, equipment and mining development
costs is value beyond proven and probable mineral reserves (VBPP),
primarily resulting from FCX’s acquisition of FMC in 2007. The
concept of VBPP may be interpreted differently by different mining
companies. FCX’s VBPP is attributable to (i) mineralized
material, which includes measured and indicated amounts, that
FCX believes could be brought into production with the
establishment or modification of required permits and should
market conditions and technical assessments warrant, (ii) inferred
mineral resources and (iii) exploration potential.

Carrying amounts assigned to VBPP are not charged to expense
until the VBPP becomes associated with additional proven and
probable mineral reserves and the reserves are produced or the
VBPP is determined to be impaired. Additions to proven and
probable mineral reserves for properties with VBPP will carry with
them the value assigned to VBPP at the date acquired, less any
impairment amounts. Refer to Note 5 for further discussion.
Impairment of Long-Lived Mining Assets. FCX assesses the
carrying values of its long-lived mining assets for impairment
when events or changes in circumstances indicate that the related
carrying amounts of such assets may not be recoverable. In
evaluating long-lived mining assets for recoverability, estimates
of pre-tax undiscounted future cash flows of FCX’s individual mines
are used. An impairment is considered to exist if total estimated
undiscounted future cash flows are less than the carrying amount
of the asset. Once it is determined that an impairment exists, an
impairment loss is measured as the amount by which the asset
carrying value exceeds its fair value. The estimated undiscounted
cash flows used to assess recoverability of long-lived assets and
to measure the fair value of FCX’s mining operations are derived
from current business plans, which are developed using near-term
price forecasts reflective of the current price environment and
management’s projections for long-term average metal prices. In
addition to near- and long-term metal price assumptions, other
key assumptions include estimates of commodity-based and
other input costs; proven and probable mineral reserves estimates,
including the timing and cost to develop and produce the
reserves; VBPP estimates; and the use of appropriate discount
rates. FCX believes its estimates and models used to determine
fair value are similar to what a market participant would use. As
quoted market prices are unavailable for FCX’s individual mining
operations, fair value is determined through the use of estimated
discounted after-tax future cash flows (i.e., Level 3 measurement).
Oil and Gas Properties. FCX follows the full cost method of
accounting specified by the U.S. Securities and Exchange
Commission’s (SEC) rules whereby all costs associated with oil
and gas property acquisition, exploration and development
activities are capitalized into a cost center on a country-by-country
basis. Such costs include internal general and administrative
costs, such as payroll and related benefits and costs directly
attributable to employees engaged in acquisition, exploration and
development activities. General and administrative costs associated
with production, operations, marketing and general corporate
activities are charged to expense as incurred. Capitalized costs,
along with estimated future costs to develop proved reserves and
asset retirement costs that are not already included in oil and
gas properties, net of related salvage value, are amortized
to expense under the UOP method using engineers’ estimates of
the related, by-country proved oil and natural gas reserves.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
The costs of unproved oil and gas properties are excluded from
amortization until the properties are evaluated. Costs are
transferred into the amortization base on an ongoing basis as the
properties are evaluated and proved oil and natural gas reserves
are established or if impairment is determined. Unproved oil and
gas properties are assessed periodically, at least annually, to
determine whether impairment has occurred. FCX assesses
unproved oil and gas properties for impairment on an individual
basis or as a group if properties are individually insignificant.
The assessment considers the following factors, among others:
intent to drill, remaining lease term, geological and geophysical
evaluations, drilling results and activity, the assignment of proved
reserves, the economic viability of development if proved
reserves are assigned and other current market conditions. During
any period in which these factors indicate an impairment, the
cumulative drilling costs incurred to date for such property and all
or a portion of the associated leasehold costs are transferred to
the full cost pool and are then subject to amortization. Including
amounts determined to be impaired, FCX transferred $6.4 billion
of costs associated with unevaluated properties to the full cost
pool in 2015, $2.5 billion in 2014 and $0.7 billion for the seven-
month period from June 1, 2013, through December 31, 2013. The
transfer of costs into the amortization base involves a significant
amount of judgment and may be subject to changes over time
based on drilling plans and results, geological and geophysical
evaluations, the assignment of proved oil and natural gas
reserves, availability of capital and other factors. Costs not subject
to amortization consist primarily of capitalized costs incurred for
undeveloped acreage and wells in progress pending determination,
together with capitalized interest for these projects. The ultimate
evaluation of the properties will occur over a period of several
years. Interest costs totaling $58 million in 2015, $88 million
in 2014 and $69 million in 2013 were capitalized on oil and gas
properties not subject to amortization and in the process
of development.
Proceeds from the sale of oil and gas properties are accounted
for as reductions to capitalized costs unless the reduction causes
a significant change in proved reserves, which, absent other
factors, is generally described as a 25 percent or greater change,
and significantly alters the relationship between capitalized costs
and proved reserves attributable to a cost center, in which case
a gain or loss is recognized.
Impairment of Oil and Gas Properties. Under the SEC full cost
accounting rules, FCX reviews the carrying value of its oil and gas
properties in the full cost pool for impairment each quarter on a
country-by-country basis. Under these rules, capitalized costs of
oil and gas properties (net of accumulated depreciation,
2015 ANNUAL REPORT 83
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
depletion, amortization and impairment, and related deferred
income taxes) for each cost center may not exceed a “ceiling”
equal to:
• the present value, discounted at 10 percent, of estimated
future net cash flows from the related proved oil and natural
gas reserves, net of estimated future income taxes; plus
• the cost of the related unproved properties not being
amortized; plus
• the lower of cost or estimated fair value of the related
unproved properties included in the costs being amortized
(net of related tax effects).
These rules require that FCX price its future oil and gas
production at the twelve-month average of the first-day-of-the-
month historical reference prices as adjusted for location and
quality differentials. FCX’s reference prices are West Texas
Intermediate (WTI) for oil and the Henry Hub price for natural gas.
Such prices are utilized except where different prices are fixed
and determinable from applicable contracts for the remaining
term of those contracts. The reserve estimates exclude the effect
of any crude oil and natural gas derivatives FCX has in place. The
estimated future net cash flows also exclude future cash outflows
associated with settling asset retirement obligations included in
the net book value of the oil and gas properties. The rules require
an impairment if the capitalized costs exceed this “ceiling.”
In 2015 and 2014, net capitalized costs with respect to FCX’s
proved oil and gas properties exceeded the related ceiling test
limitation; therefore, impairment charges of $13.1 billion were
recorded in 2015 and $3.7 billion in 2014, primarily because of the
lower twelve-month average of the first-day-of-the-month
historical reference oil price and additional capitalized costs. The
twelve-month average WTI reference oil price was $50.28 per
barrel at December 31, 2015, compared with $94.99 per barrel at
December 31, 2014.
Goodwill. Goodwill has an indefinite useful life and is not
amortized, but rather is tested for impairment at least annually
during the fourth quarter, unless events occur or circumstances
change between annual tests that would more likely than not
reduce the fair value of a related reporting unit below its carrying
value. Impairment occurs when the carrying amount of goodwill
exceeds its implied fair value. FCX generally uses a discounted
cash flow model to determine if the carrying value of a reporting
unit, including goodwill, is less than the fair value of the reporting
unit. FCX’s approach to allocating goodwill includes the
identification of the reporting unit it believes has contributed to
the excess purchase price and includes consideration of the
reporting unit’s potential for future growth. Goodwill arose in
2013 with FCX’s acquisitions of PXP and MMR, and was allocated
to the U.S. oil and gas reporting unit. When a sale of oil and gas
properties occurs, goodwill is allocated to that property based on
the relationship of the fair value of the property sold to the total
reporting unit’s fair value. Events affecting crude oil and natural
84
gas prices caused a decrease in the fair value of the U.S. oil and
gas reporting unit in 2014, which resulted in the full impairment of
goodwill (refer to Note 2 for further discussion).
Deferred Mining Costs. Stripping costs (i.e., the costs of
removing overburden and waste material to access mineral
deposits) incurred during the production phase of a mine are
considered variable production costs and are included as a
component of inventory produced during the period in which
stripping costs are incurred. Major development expenditures,
including stripping costs to prepare unique and identifiable areas
outside the current mining area for future production that are
considered to be pre-production mine development, are capitalized
and amortized using the UOP method based on estimated
recoverable proven and probable reserves for the ore body
benefited. However, where a second or subsequent pit or major
expansion is considered to be a continuation of existing mining
activities, stripping costs are accounted for as a current
production cost and a component of the associated inventory.
Environmental Expenditures. Environmental expenditures are
charged to expense or capitalized, depending upon their future
economic benefits. Accruals for such expenditures are recorded
when it is probable that obligations have been incurred and the
costs can be reasonably estimated. Environmental obligations
attributed to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA) or analogous
state programs are considered probable when a claim is asserted,
or is probable of assertion, and FCX, or any of its subsidiaries,
have been associated with the site. Other environmental
remediation obligations are considered probable based on
specific facts and circumstances. FCX’s estimates of these costs
are based on an evaluation of various factors, including currently
available facts, existing technology, presently enacted laws and
regulations, remediation experience, whether or not FCX is a
potentially responsible party (PRP) and the ability of other PRPs
to pay their allocated portions. With the exception of those
obligations assumed in the acquisition of FMC that were initially
recorded at estimated fair values (refer to Note 12 for further
discussion), environmental obligations are recorded on an
undiscounted basis. Where the available information is sufficient
to estimate the amount of the obligation, that estimate has been
used. Where the information is only sufficient to establish a range
of probable liability and no point within the range is more likely
than any other, the lower end of the range has been used. Possible
recoveries of some of these costs from other parties are not
recognized in the consolidated financial statements until they
become probable. Legal costs associated with environmental
remediation (such as fees to outside law firms for work relating
to determining the extent and type of remedial actions and
the allocation of costs among PRPs) are included as part of the
estimated obligation.

Environmental obligations assumed in the acquisition of FMC,
which were initially recorded at fair value and estimated on a
discounted basis, are accreted to full value over time through
charges to interest expense. Adjustments arising from changes in
amounts and timing of estimated costs and settlements may result
in increases and decreases in these obligations and are calculated
in the same manner as they were initially estimated. Unless these
adjustments qualify for capitalization, changes in environmental
obligations are charged to operating income when they occur.
FCX performs a comprehensive review of its environmental
obligations annually and also reviews changes in facts and
circumstances associated with these obligations at least quarterly.
Asset Retirement Obligations. FCX records the fair value of
estimated asset retirement obligations (AROs) associated with
tangible long-lived assets in the period incurred. Retirement
obligations associated with long-lived assets are those for which
there is a legal obligation to settle under existing or enacted law,
statute, written or oral contract or by legal construction. These
obligations, which are initially estimated based on discounted
cash flow estimates, are accreted to full value over time through
charges to cost of sales. In addition, asset retirement costs (ARCs)
are capitalized as part of the related asset’s carrying value and
are depreciated over the asset’s respective useful life.
For mining operations, reclamation costs for disturbances are
recognized as an ARO and as a related ARC (included in property,
plant, equipment and mining development costs) in the period of
the disturbance and depreciated primarily on a UOP basis. FCX’s
AROs for mining operations consist primarily of costs associated
with mine reclamation and closure activities. These activities,
which are site specific, generally include costs for earthwork,
revegetation, water treatment and demolition (refer to Note 12 for
further discussion).
For oil and gas properties, the fair value of the legal obligation is
recognized as an ARO and as a related ARC (included in oil and
gas properties) in the period in which the well is drilled or acquired
and is amortized on a UOP basis together with other capitalized
costs. Substantially all of FCX’s oil and gas leases require that, upon
termination of economic production, the working interest owners
plug and abandon non-producing wellbores; remove platforms,
tanks, production equipment and flow lines; and restore the wellsite
(refer to Note 12 for further discussion).
At least annually, FCX reviews its ARO estimates for changes
in the projected timing of certain reclamation and closure/
restoration costs, changes in cost estimates and additional AROs
incurred during the period.
Revenue Recognition. FCX sells its products pursuant to sales
contracts entered into with its customers. Revenue for all
FCX’s products is recognized when title and risk of loss pass to
the customer and when collectibility is reasonably assured.
The passing of title and risk of loss to the customer are based on
terms of the sales contract, generally upon shipment or delivery
of product.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Revenues from FCX’s concentrate and cathode sales are
recorded based on a provisional sales price or a final sales price
calculated in accordance with the terms specified in the relevant
sales contract. Revenues from concentrate sales are recorded net
of treatment and all refining charges and the impact of derivative
contracts. Moreover, because a portion of the metals contained in
copper concentrate is unrecoverable as a result of the smelting
process, FCX’s revenues from concentrate sales are also recorded
net of allowances based on the quantity and value of these
unrecoverable metals. These allowances are a negotiated term of
FCX’s contracts and vary by customer. Treatment and refining
charges represent payments or price adjustments to smelters and
refiners that are generally fixed.
Under the long-established structure of sales agreements
prevalent in the mining industry, copper contained in concentrate
and cathode is generally provisionally priced at the time of
shipment. The provisional prices are finalized in a specified future
month (generally one to four months from the shipment date)
based on quoted monthly average spot copper prices on the
London Metal Exchange (LME) or the Commodity Exchange Inc.
(COMEX), a division of the New York Mercantile Exchange
(NYMEX). FCX receives market prices based on prices in the
specified future month, which results in price fluctuations
recorded to revenues until the date of settlement. FCX records
revenues and invoices customers at the time of shipment based
on then-current LME or COMEX prices, which results in an
embedded derivative (i.e., a pricing mechanism that is finalized
after the time of delivery) that is required to be bifurcated from
the host contract. The host contract is the sale of the metals
contained in the concentrate or cathode at the then-current LME or
COMEX price. FCX applies the normal purchases and normal
sales scope exception in accordance with derivatives and hedge
accounting guidance to the host contract in its concentrate or
cathode sales agreements since these contracts do not allow for
net settlement and always result in physical delivery. The
embedded derivative does not qualify for hedge accounting and is
adjusted to fair value through earnings each period, using the
period-end forward prices, until the date of final pricing.
Gold sales are priced according to individual contract terms,
generally the average London Bullion Market Association
(London) price for a specified month near the month of shipment.
The majority of FCX’s 2015 molybdenum sales were priced
based on prices published in Metals Week, Ryan’s Notes or Metal
Bulletin, plus conversion premiums for products that undergo
additional processing, such as ferromolybdenum and
molybdenum chemical products. Most of these sales use the
average price of the previous month quoted by the applicable
publication. In 2015, FCX’s remaining molybdenum sales
generally had pricing that was either based on the current month
published prices or a fixed price. FCX engaged in discussions with
its molybdenum chemical product customers during the second
half of 2015 and established floor index prices or prices that
2015 ANNUAL REPORT 85
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

adjust within certain ranges for its chemical products to promote
continuation of chemical-grade production.
PT-FI concentrate sales, Tenke Fungurume Mining S.A. (TFM or
Tenke) metal sales and certain Sociedad Minera Cerro Verde
S.A.A. (Cerro Verde) metal sales are subject to certain royalties,
which are recorded as a reduction to revenues. TFM and Cerro
Verde are subsidiaries of FMC. In addition, PT-FI concentrate
sales are also subject to export duties beginning in 2014, which
are recorded as a reduction to revenues. Refer to Note 13 for
further discussion.
Oil and gas revenue from FCX’s interests in producing wells is
recognized upon delivery and passage of title, net of any royalty
interests or other profit interests in the produced product. Oil
sales are primarily under contracts with prices based upon
regional benchmarks. Approximately 30 percent of gas sales is
priced monthly using industry-recognized, published index
pricing, and the remainder is priced daily on the spot market. Gas
revenue is recorded using the sales method for gas imbalances.
If FCX’s sales of production volumes for a well exceed its portion
of the estimated remaining recoverable reserves of the well, a
liability is recorded. No receivables are recorded for those wells
on which FCX has taken less than its ownership share of
production unless the amount taken by other parties exceeds the
estimate of their remaining reserves. There were no material gas
imbalances at December 31, 2015.
Stock-Based Compensation. Compensation costs for share-
based payments to employees are measured at fair value and
charged to expense over the requisite service period for awards
that are expected to vest. The fair value of stock options is
determined using the Black-Scholes-Merton option valuation
model. The fair value for stock-settled restricted stock units
(RSUs) is based on FCX’s stock price on the date of grant. Shares
of common stock are issued at the vesting date for stock-settled
RSUs. The fair value of the performance share units (PSUs) and
the performance-based RSUs are determined using a Monte-Carlo
simulation model. The fair value for liability-classified awards
(i.e., cash-settled stock appreciation rights (SARs) and cash-
settled RSUs) is remeasured each reporting period using the
Black-Scholes-Merton option valuation model for SARs and FCX’s
stock price for cash-settled RSUs. FCX has elected to recognize
compensation costs for stock option awards and SARs that vest
over several years on a straight-line basis over the vesting period,
and for RSUs on the graded-vesting method over the vesting
period. Refer to Note 10 for further discussion.
Earnings Per Share. FCX’s basic net (loss) income per share of
common stock was computed by dividing net (loss) income
attributable to FCX common stockholders by the weighted-
average shares of common stock outstanding during the year.
Diluted net income per share of common stock was computed
using the most dilutive of (a) the two-class method or (b) the
treasury stock method. Under the two-class method, net income
is allocated to each class of common stock and participating
securities as if all of the earnings for the period had been
distributed. FCX’s participating securities consist of vested RSUs
for which the underlying common shares are not yet issued and
entitle holders to non-forfeitable dividends.
A reconciliation of net (loss) income and weighted-average
shares of common stock outstanding for purposes of calculating
basic and diluted net (loss) income per share for the years ended
December 31 follows:

2015 2014 2013

Net (loss) income $ (12,089) $ (745) $ 3,441

Net income attributable to noncontrolling interests (106) (523) (761)
Preferred dividends on redeemable noncontrolling interest (41) (40) (22)
Undistributed earnings allocable to participating securities (3) (3) —
Net (loss) income allocable to FCX common stockholders $ (12,239) $ (1,311) $ 2,658
Basic weighted-average shares of common stock outstanding (millions) 1,082 1,039 1,002
Add shares issuable upon exercise or vesting of dilutive stock options and RSUs (millions) —a —a 4a
Diluted weighted-average shares of common stock outstanding (millions) 1,082 1,039 1,006
Basic net (loss) income per share attributable to common stockholders $ (11.31) $ (1.26) $ 2.65
Diluted net (loss) income per share attributable to common stockholders $ (11.31) $ (1.26) $ 2.64

a. Excludes approximately 9 million shares of common stock in 2015, 10 million in 2014 and 1 million in 2013 associated with outstanding stock options with exercise prices less than the
average market price of FCX’s common stock and RSUs that were anti-dilutive.

86

Outstanding stock options with exercise prices greater than the
average market price of FCX’s common stock during the year are
excluded from the computation of diluted net income per share of
common stock. Excluded stock options totaled 45 million shares
of common stock in 2015, 31 million in 2014 and 30 million in 2013.
New Accounting Standards. In May 2014, the Financial Accounting
Standards Board (FASB) issued an Accounting Standards Update
(ASU) that provides a single comprehensive revenue recognition
model, which will replace most existing revenue recognition
guidance, and also requires expanded disclosures. The core principle
of the model is that revenue is recognized when control of goods
or services has been transferred to customers at an amount that
reflects the consideration to which an entity expects to be entitled
in exchange for those goods or services. For public entities, this
ASU is effective for annual reporting periods beginning after
December 15, 2017 (following FASB’s August 2015 ASU of a one-year
deferral of the effective date), and interim reporting periods within
that reporting period. Early adoption is permitted for annual
reporting periods beginning after December 15, 2016, and interim
reporting periods within that reporting period. This ASU may
be applied either retrospectively to each period presented or as
a cumulative-effect adjustment as of the date of adoption.
FCX is currently evaluating the impact of the new guidance on
its financial reporting and disclosures, but at this time does not
expect adoption of this ASU to have a material impact on its
financial statements.
In April 2015, FASB issued an ASU to simplify the presentation
of debt issuance costs. This ASU requires that debt issuance costs
related to a recognized debt liability be presented in the balance
sheet as a direct deduction from the carrying amount of that debt
liability, consistent with debt discounts. Since the April 2015
ASU did not address the presentation or subsequent
measurement of debt issuance costs related to line-of-credit
arrangements, FASB issued an ASU in August 2015 that allows an
entity to defer and present debt issuance costs related to these
arrangements as an asset and subsequently amortize the debt
issuance costs ratably over the term of the arrangement,
regardless of whether there are any outstanding borrowings on
the line-of-credit arrangement. For public entities, these ASUs are
effective for annual periods beginning after December 15, 2015,
and interim periods within those fiscal years. Early adoption is
permitted for financial statements that have not been previously
issued. FCX adopted these ASUs and retrospectively adjusted its
previously issued financial statements. Upon adoption, FCX
adjusted its December 31, 2014, balance sheet by decreasing
other assets and long-term debt by $121 million for debt issuance
costs related to corresponding debt balances. FCX elected to
continue presenting debt issuance costs ($22 million as of
December 31, 2015) for its revolving credit facility as a deferred
charge (asset) because of the volatility of its borrowings and
repayments under the facility.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
In July 2015, FASB issued an ASU that simplifies the
subsequent measurement of inventory by requiring entities to
measure inventory at the lower of cost or net realizable value,
except for inventory measured using the last-in, first-out (LIFO) or
the retail inventory methods. Under the new guidance, entities are
only required to compare the cost of inventory to one measure —
net realizable value. Net realizable value is the estimated selling
price in the ordinary course of business, less reasonably
predictable costs of completion, disposal and transportation. For
public entities, this ASU is effective for annual periods beginning
after December 15, 2016, and interim periods within those fiscal
years. Early adoption is permitted as of the beginning of an
interim or annual reporting period. This ASU must be applied
prospectively. FCX adopted this ASU effective July 1, 2015, and it
had no impact on its results of operations.
In November 2015, FASB issued an ASU to simplify the
presentation of deferred income taxes by requiring entities to
classify all deferred tax assets and liabilities as noncurrent
on the balance sheet, rather than separating deferred taxes into
current and noncurrent amounts. For public entities, this ASU
is effective for annual and interim periods beginning after
December 15, 2016. Early adoption is permitted as of the beginning
of an interim or annual reporting period. This ASU may be
applied either prospectively to all deferred tax liabilities and assets
or retrospectively to all periods presented. FCX adopted this
ASU prospectively effective October 1, 2015, and prior periods
were not retrospectively adjusted.
Reclassifications. As a result of adopting new accounting
guidance in 2015, debt issuance costs as of December 31, 2014, have
been reclassified to conform with the current year presentation.
NOTE 2. DISPOSITIONS AND ACQUISITIONS
Candelaria and Ojos del Salado Disposition. On November 3, 2014,
FCX completed the sale of its 80 percent ownership interests
in the Candelaria and Ojos del Salado copper mining operations
and supporting infrastructure located in Chile to Lundin Mining
Corporation (Lundin) for $1.8 billion in cash, before closing
adjustments, and contingent consideration of up to $200 million.
Contingent consideration is calculated as five percent of net
copper revenues in any annual period over the ensuing five years
when the average realized copper price exceeds $4.00 per pound.
Excluding contingent consideration, after-tax net proceeds totaled
$1.5 billion, and FCX recorded a gain of $671 million ($450 million
to net loss attributable to common stockholders) associated
with this transaction. The transaction had an effective date of
June 30, 2014. FCX used the proceeds from this transaction to
repay indebtedness.
2015 ANNUAL REPORT 87
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

This sale did not meet the criteria for classification as a
discontinued operation under the April 2014 ASU issued by FASB,
which FCX early adopted in first-quarter 2014. The following table
provides balances of the major classes of assets and liabilities
for the Candelaria and Ojos del Salado mines at November 3, 2014:
Current assets $ 482
Long-term assets 1,155
Current liabilities 129
Long-term liabilities 89
Noncontrolling interests 243
The following table provides net income before income taxes
and net income attributable to common stockholders for the
Candelaria and Ojos del Salado mines:
January 1, 2014, Year Ended
to December 31,
November 3, 2014 2013
Net income before income taxes $ 270 $ 689
Net income attributable to common stockholders 144 341
Eagle Ford Disposition. On June 20, 2014, FCX completed the
sale of its Eagle Ford shale assets to a subsidiary of Encana
Corporation for cash consideration of $3.1 billion, before closing
adjustments from the April 1, 2014, effective date. Under full cost
accounting rules, the proceeds were recorded as a reduction of
capitalized oil and gas properties, with no gain or loss recognition,
except for $84 million of deferred tax expense recorded in
connection with the allocation of $221 million of goodwill (for
which deferred taxes were not previously provided) to the Eagle
Ford shale assets. Approximately $1.3 billion of proceeds from
this transaction was placed in a like-kind exchange escrow and
was used to reinvest in additional Deepwater Gulf of Mexico
(GOM) oil and gas interests, as discussed below. The remaining
proceeds were used to repay debt.
Deepwater GOM Acquisitions. On June 30, 2014, FCX completed
the acquisition of oil and gas interests in the Deepwater GOM
from a subsidiary of Apache Corporation, including interests in
the Lucius and Heidelberg oil fields and several exploration
leases, for $918 million ($451 million for oil and gas properties
subject to amortization and $477 million for costs not subject to
PXP and MMR Acquisitions. FCX acquired PXP on May 31, 2013,
and MMR on June 3, 2013. These acquisitions added a portfolio of
oil and gas assets to FCX’s global mining business, creating a
U.S.-based natural resources company. At the time of the
acquisitions, FCX’s portfolio of oil and gas assets included oil and
natural gas production facilities in the GOM, Texas, onshore
and offshore California, Louisiana and in central Wyoming, and a
position in the Inboard Lower Tertiary/Cretaceous natural gas
trend onshore in South Louisiana. The acquisitions have been
accounted for under the acquisition method, with FCX as the
acquirer. As further discussed in Note 8, FCX issued $6.5 billion
of unsecured senior notes in March 2013 for net proceeds of
$6.4 billion, which were used, together with borrowings under a
$4.0 billion unsecured five-year bank term loan, to fund the
cash portion of the merger consideration for both transactions,
to repay certain indebtedness of PXP and for general
corporate purposes.
In the PXP acquisition, FCX acquired PXP for per-share
consideration equivalent to 0.6531 shares of FCX common stock
and $25.00 in cash. FCX issued 91 million shares of its common
stock and paid $3.8 billion in cash (which included $411 million
for the value of the $3 per share special dividend paid to PXP
stockholders on May 31, 2013). Following is a summary of the
$6.6 billion purchase price for PXP:
Number of shares of PXP common stock acquired (millions) 132.280
Exchange ratio of FCX common stock for each PXP share 0.6531
86.392
Shares of FCX common stock issued for certain
PXP equity awards (millions) 4.769
Total shares of FCX common stock issued (millions) 91.161
Closing share price of FCX common stock at May 31, 2013 $ 31.05
FCX stock consideration $ 2,831
Cash consideration 3,725 a
Employee stock-based awards, primarily cash-settled
stock-based awards 83
Total purchase price $ 6,639
a. Cash consideration includes the payment of $25.00 in cash for each PXP share
($3.3 billion), cash paid in lieu of any fractional shares of FCX common stock, cash
paid for certain equity awards ($7 million) and the value of the $3 per share PXP
special cash dividend ($411 million) paid on May 31, 2013.

amortization, including transaction costs and $10 million of asset

retirement costs). The Deepwater GOM acquisition was funded
by the like-kind exchange escrow.
On September 8, 2014, FCX completed the acquisition of
additional Deepwater GOM interests for $496 million ($509 million
for oil and gas properties not subject to amortization, including
purchase price adjustments and transaction costs), including an
interest in the Vito oil discovery in the Mississippi Canyon area
and a significant lease position in the Vito Basin area. This
acquisition was funded in part with the remaining $414 million
of funds from the like-kind exchange escrow.

88

In the MMR acquisition, for each MMR share owned, MMR
stockholders received $14.75 in cash and 1.15 units of a royalty
trust, which holds a 5 percent overriding royalty interest in future
production from MMR’s Inboard Lower Tertiary/Cretaceous
exploration prospects that existed as of December 5, 2012, the
date of the merger agreement. MMR conveyed the royalty
interests to the royalty trust immediately prior to the effective
time of the merger, and they were “carved out” of the mineral
interests that were acquired by FCX and not considered part of
purchase consideration.
Prior to June 3, 2013, FCX owned 500,000 shares of MMR’s
5.75% Convertible Perpetual Preferred Stock, Series 2, which were
accounted for under the cost method and recorded on FCX’s
balance sheet at $432 million on May 31, 2013. Through its
acquisition of PXP on May 31, 2013, FCX acquired 51 million shares
of MMR’s common stock, which had a fair value of $848 million
on that date based upon the closing market price of MMR’s
common stock ($16.63 per share, i.e., Level 1 measurement). As a
result of FCX obtaining control of MMR on June 3, 2013, FCX
remeasured its ownership interests in MMR to a fair value of
$1.4 billion, resulting in a gain of $128 million that was recorded in
Current assets $ 1,193 $ 98 $ — $ 1,291
Oil and gas properties – full cost method:
Subject to amortization 11,447 751 — 12,198
Not subject to amortization 9,401 1,711 — 11,112
Property, plant and equipment 261 1 — 262
Investment in MMRa 848 — (848) —
Other assets 12 382 — 394
Current liabilities (906) (174) — (1,080)
Debt (current and long-term) (10,631) (620) — (11,251)
Deferred income taxesb (3,917) — — (3,917)
Other long-term liabilities (799) (262) — (1,061)
Redeemable noncontrolling interest (708) (259) — (967)
Total fair value, excluding goodwill 6,201 1,628 (848) 6,981
Goodwill 438 1,500 — 1,938
Total purchase price $ 6,639 $ 3,128 $ (848) $ 8,919
a. PXP owned 51 million shares of MMR common stock, which were eliminated in FCX’s consolidated balance sheet at the acquisition date of MMR.
b. Deferred income taxes have been recognized based on the estimated fair value adjustments to net assets using a 38 percent tax rate, which reflected a 35 percent federal statutory
rate and a 3 percent weighted-average of the applicable statutory state tax rates (net of federal benefit).
In accordance with the acquisition method of accounting, the
purchase price from FCX’s acquisitions of both PXP and MMR has
been allocated to the assets acquired, liabilities assumed and
redeemable noncontrolling interest based on their estimated fair
values on the respective acquisition dates. The fair value
estimates were based on, but not limited to, quoted market prices,
where available; expected future cash flows based on estimated
reserve quantities; costs to produce and develop reserves; current
replacement cost for similar capacity for certain fixed assets;
market rate assumptions for contractual obligations; appropriate
discount rates and growth rates; and crude oil and natural gas
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
2013. Fair value was calculated using the closing quoted market
price of MMR’s common stock on June 3, 2013, of $16.75 per share
(i.e., Level 1 measurement) and a valuation model using observable
inputs (i.e., Level 2 measurement) for the preferred stock. Following
is a summary of the $3.1 billion purchase price for MMR:
Number of shares of MMR common stock acquired (millions) 112.362 a
Cash consideration of $14.75 per share $ 14.75
Cash consideration paid by FCX $ 1,657
Employee stock-based awards 63
Total 1,720
Fair value of FCX’s investment in 51 million shares
of MMR common stock acquired on
May 31, 2013, through the acquisition of PXP 854
Fair value of FCX’s investment in MMR’s 5.75%
Convertible Perpetual Preferred Stock, Series 2 554
Total purchase price $ 3,128
a. Excludes 51 million shares of MMR common stock owned by FCX through its
acquisition of PXP on May 31, 2013.
The following table summarizes the final purchase price allocations
for PXP and MMR:
PXP MMR Eliminations Total
forward prices. The excess of the total consideration over the
estimated fair value of the amounts assigned to the identifiable
assets acquired, liabilities assumed and redeemable noncontrolling
interest was recorded as goodwill. Goodwill recorded in
connection with the acquisitions is not deductible for income
tax purposes.
The fair value measurement of the oil and gas properties, asset
retirement obligations included in other liabilities (refer to Note 12
for further discussion) and redeemable noncontrolling interest
were based, in part, on significant inputs not observable in the
market (as discussed above) and thus represents a Level 3
2015 ANNUAL REPORT 89
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
measurement. The fair value measurement of long-term debt,
including the current portion, was based on prices obtained from
a readily available pricing source and thus represents a Level 2
measurement.
During second-quarter 2014, FCX finalized the purchase price
allocations, which resulted in a decrease of $5 million to oil and
gas properties subject to amortization, an increase of $25 million
to oil and gas properties not subject to amortization, a net
decrease of $42 million to deferred income tax assets and an
increase of $22 million to goodwill.
Goodwill arose on these acquisitions principally because of
limited drilling activities to date and the absence of production
history and material reserve data associated with the very large
estimated geologic potential of an emerging trend targeting
deep-seated structures in the shallow waters of the GOM and
onshore analogous to large discoveries in the Deepwater GOM
and other proven basins’ prospects. In addition, goodwill also
resulted from the requirement to recognize deferred taxes on the
difference between the fair value and the tax basis of the
acquired assets.
A summary of changes in the carrying amount of goodwill
follows:
Balance at January 1, 2013 $ —
Acquisitions of PXP and MMR 1,916
Balance at December 31, 2013 1,916
Purchase accounting adjustments 22
Disposal of Eagle Ford (see above) (221)
Impairment charge (1,717)
Balance at December 31, 2014 $ —
During fourth-quarter 2014, FCX conducted a goodwill impairment
assessment because of the significant decline in oil prices, which
resulted in an impairment charge of $1.7 billion for the full carrying
value of goodwill. Crude oil prices and FCX’s estimates of oil
reserves at December 31, 2014, represented the most significant
assumptions used in FCX’s evaluation of goodwill (i.e., Level 3
measurement). Forward strip Brent oil prices used in FCX’s
estimates at December 31, 2014, ranged from approximately
$ 62 per barrel to $80 per barrel for the years 2015 through 2021,
compared with a range from approximately $90 per barrel to
$98 per barrel at the acquisition date.
Refer to Note 16 for the revenue and operating (loss) income
that FM O&G contributed to FCX’s consolidated results for the
years ended December 31, 2015 and 2014, and for the seven-month
period from June 1, 2013, to December 31, 2013. FCX’s acquisition-
related costs for PXP and MMR totaled $74 million in 2013 and
were included in selling, general and administrative expenses in
the consolidated statement of operations. In addition, FCX
deferred debt issuance costs of $96 million in connection with the
debt financings for the acquisitions (refer to Note 8 for further
discussion of the debt financings).
90
Redeemable Noncontrolling Interest — PXP. In 2011, PXP issued
(i) 450,000 shares of Plains Offshore Operations Inc. (Plains
Offshore, a consolidated subsidiary of FM O&G) 8% Convertible
Preferred Stock (Preferred Stock) for gross proceeds of $450
million and (ii) non-detachable warrants with an exercise price of
$20 per share to purchase in aggregate 9.1 million shares of Plains
Offshore’s common stock. In 2011, Plains Offshore also issued
87 million shares of Plains Offshore Class A common stock, which
will be held in escrow until the conversion and cancellation of the
Preferred Stock or the exercise of the warrants. In January 2014,
Plains Offshore issued (i) 24,000 shares of Preferred Stock for
gross proceeds of $24 million and (ii) non-detachable warrants
with an exercise price of $20 per share to purchase in aggregate
0.5 million shares of Plains Offshore’s common stock. Plains
Offshore holds certain of FM O&G’s oil and gas properties and
assets located in the GOM in water depths of 500 feet or
more, including the Lucius oil field and the Phobos discovery,
but excluding the properties acquired by PXP in 2012 from
BP Exploration & Production Inc., BP America Production
Company and Shell Offshore Inc. The Preferred Stock represents
a 20 percent equity interest in Plains Offshore and is entitled
to a dividend of 8 percent per annum, payable quarterly, of which
2 percent may be deferred ($47 million of accumulated deferred
dividends as of December 31, 2015). The preferred holders are
entitled to vote on all matters on which Plains Offshore common
stockholders are entitled to vote. The shares of Preferred Stock
also fully participate, on an as-converted basis at four times, in
cash dividends distributed to any class of common stockholders
of Plains Offshore. Plains Offshore has not distributed any
dividends to its common stockholders.
The holders of the Preferred Stock (preferred holders) have
the right, at any time at their option, to convert any or all of such
holder’s shares of Preferred Stock and exercise any of the
associated non-detachable warrants into shares of Class A common
stock of Plains Offshore, at an initial conversion/exercise price
of $20 per share; the conversion price is subject to adjustment as
a result of certain events. At any time on or after November 17,
2016, the fifth anniversary of the closing date, FM O&G may
exercise a call right to purchase all, but not less than all, of the
outstanding shares of Preferred Stock and associated
non-detachable warrants for cash, at a price equal to a liquidation
preference as defined in the agreement. At any time, a majority of
the preferred holders may cause Plains Offshore to use its
commercially reasonable efforts to consummate an exit event as
defined in the agreement.
The non-detachable warrants are considered to be embedded
derivative instruments for accounting purposes and have been
assessed as not being clearly and closely related to the Preferred
Stock. Therefore, the warrants are classified as a long-term
liability in the accompanying consolidated balance sheets and are
adjusted to fair value each reporting period with adjustments
recorded in other income (expense).

The Preferred Stock of Plains Offshore is classified as temporary
equity because of its redemption features and is therefore
reported outside of permanent equity in FCX’s consolidated
balance sheets. The redeemable noncontrolling interest totaled
$764 million as of December 31, 2015, and $751 million as of
December 31, 2014. Remeasurement of the redeemable
noncontrolling interest represents its initial carrying amount
adjusted for any noncontrolling interest’s share of net income
(loss) or changes to the redemption value. Additionally, the
carrying amount will be further increased by amounts
representing dividends not currently declared or paid, but which
are payable under the redemption features. Future mark-to-
market adjustments to the redemption value, subject to a
minimum balance of the original recorded value ($708 million) on
May 31, 2013, shall be reflected in retained earnings and earnings
per share. Changes in the redemption value above the original
recorded value are accreted over the period from the date FCX
acquired PXP to the earliest redemption date. Because the
redemption value has not exceeded the original recorded value,
no amounts have been accreted.
Redeemable Noncontrolling Interest — MMR. Following FCX’s
acquisition of MMR, MMR’s 8% Convertible Perpetual Preferred
Stock and 5.75% Convertible Perpetual Preferred Stock, Series 1
(totaling $259 million) converted during 2013 primarily at the
make-whole conversion rates for which holders received cash of
$228 million and 17.7 million royalty trust units with a fair value of
$31 million at the acquisition date.
Unaudited Pro Forma Consolidated Financial Information. The
following unaudited FCX consolidated pro forma financial
information has been prepared to reflect the acquisitions of PXP
and MMR. The unaudited pro forma financial information
combines the historical statements of income of FCX, PXP and
MMR (including the pro forma effects of PXP’s GOM acquisition
that was completed on November 30, 2012) for the year ended
December 31, 2013, giving effect to the mergers as if they had
occurred on January 1, 2012. The historical consolidated financial
information for the year ended December 31, 2013, shown below
has been adjusted to reflect factually supportable items that are
directly attributable to the acquisitions.
Revenues $ 23,075
Operating income 6,267
Income from continuing operations 3,626
Net income attributable to common stockholders 2,825
Net income per share attributable to common stockholders:
Basic $ 2.71
Diluted 2.70
The above unaudited pro forma consolidated information has
been prepared for illustrative purposes only and is not intended to
be indicative of the results of operations that actually would have
occurred, or the results of operations expected in future periods,
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
had the events reflected herein occurred on the date indicated.
The most significant pro forma adjustments to income from
continuing operations for the year ended December 31, 2013, were
to exclude $519 million of acquisition-related costs, the net tax
benefit of $199 million of acquisition-related adjustments and the
$128 million gain on the investment in MMR. Additionally, the pro
forma consolidated information excluded a $77 million gain on
the sale of oil and gas properties reflected in MMR’s results of
operations prior to the acquisition because of the application of
the full cost accounting method.
Cobalt Chemical Refinery Business. On March 29, 2013, FCX,
through a newly formed consolidated joint venture, completed the
acquisition of a cobalt chemical refinery in Kokkola, Finland, and
the related sales and marketing business. The acquisition provides
direct end-market access for the cobalt hydroxide production at
Tenke. The joint venture operates under the name Freeport Cobalt,
and FCX is the operator with an effective 56 percent ownership
interest. The remaining effective ownership interest is held
by FCX’s partners in TFM, including 24 percent by Lundin and
20 percent by La Générale des Carrières et des Mines (Gécamines).
Consideration paid was $382 million, which included $34 million
for cash acquired, and was funded 70 percent by FCX and 30 percent
by Lundin. Under the terms of the acquisition agreement, there is
also the potential for additional consideration of up to $110 million
over a period of three years, contingent upon the achievement of
revenue-based performance targets. As of December 31, 2015, no
amount was recorded for this contingency because these targets
are not expected to be achieved.
NOTE 3. OWNERSHIP IN SUBSIDIARIES
AND JOINT VENTURES
Ownership in Subsidiaries. FMC is a fully integrated producer of
copper and molybdenum, with mines in North America, South
America and the Tenke minerals district in the Democratic
Republic of Congo (DRC). At December 31, 2015, FMC’s operating
mines in North America were Morenci, Bagdad, Safford, Sierrita
and Miami located in Arizona; Tyrone and Chino located in New
Mexico; and Henderson and Climax located in Colorado. FCX has
an 85 percent interest in Morenci (refer to “Joint Ventures —
Sumitomo”) and owns 100 percent of the other North America
mines. At December 31, 2015, operating mines in South America
were Cerro Verde (53.56 percent owned) located in Peru and
El Abra (51 percent owned) located in Chile. At December 31,
2015, FMC owned an effective 56 percent interest in the Tenke
minerals district in the DRC. At December 31, 2015, FMC’s net
assets totaled $18.9 billion and its accumulated deficit totaled $10.4
billion. FCX had no loans outstanding to FMC at December 31, 2015.
FCX’s direct ownership in PT-FI totals 81.28 percent.
PT Indocopper Investama, an Indonesian company, owns 9.36
percent of PT-FI, and FCX owns 100 percent of PT Indocopper
2015 ANNUAL REPORT 91
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Investama. Refer to “Joint Ventures — Rio Tinto” for discussion of
the unincorporated joint venture. At December 31, 2015, PT-FI’s
net assets totaled $5.6 billion and its retained earnings totaled
$5.4 billion. FCX had $310 million in intercompany loans outstanding
to PT-FI at December 31, 2015.
FCX owns 100 percent of the outstanding Atlantic Copper
common stock. At December 31, 2015, Atlantic Copper’s net
liabilities totaled $79 million and its accumulated deficit totaled
$489 million. FCX had $248 million in intercompany loans
outstanding to Atlantic Copper at December 31, 2015.
FCX owns 100 percent of FM O&G, which has a portfolio of oil
and gas assets. At December 31, 2015, FM O&G’s net liabilities
totaled $7.4 billion and its accumulated deficit totaled $19.0
billion. FCX had $6.6 billion in intercompany loans outstanding to
FM O&G at December 31, 2015.
Joint Ventures. FCX has the following unincorporated joint
ventures.
Rio Tinto. PT-FI and Rio Tinto have established an unincorporated
joint venture pursuant to which Rio Tinto has a 40 percent
interest in PT-FI’s Contract of Work (COW) and the option to
participate in 40 percent of any other future exploration projects
in Papua, Indonesia.
Pursuant to the joint venture agreement, Rio Tinto has a
40 percent interest in certain assets and future production
exceeding specified annual amounts of copper, gold and silver
through 2021 in Block A of PT-FI’s COW, and, after 2021, a 40 percent
interest in all production from Block A. All of PT-FI’s proven and
probable reserves and all its mining operations are located in the
Block A area. PT-FI receives 100 percent of production and related
revenues from reserves established as of December 31, 1994
(27.1 billion pounds of copper, 38.4 million ounces of gold and
75.8 million ounces of silver), divided into annual portions subject
to reallocation for events causing changes in the anticipated
production schedule. Production and related revenues exceeding
those annual amounts (referred to as incremental expansion
revenues) are shared 60 percent PT-FI and 40 percent Rio Tinto.
Operating, nonexpansion capital and administrative costs are
shared 60 percent PT-FI and 40 percent Rio Tinto based on the
ratio of (i) the incremental expansion revenues to (ii) total
revenues from production from Block A, with PT-FI responsible
for the rest of such costs. PT-FI will continue to receive 100 percent
of the cash flow from specified annual amounts of copper, gold
and silver through 2021 calculated by reference to its proven and
probable reserves as of December 31, 1994, and 60 percent
of all remaining cash flow. Expansion capital costs are shared
60 percent PT-FI and 40 percent Rio Tinto. The payable to Rio Tinto
for its share of joint venture cash flows was $10 million at
December 31, 2015, and $29 million at December 31, 2014.
Sumitomo. FCX owns an 85 percent undivided interest in Morenci
via an unincorporated joint venture. The remaining 15 percent is
owned by Sumitomo, a jointly owned subsidiary of Sumitomo Metal
Mining Co., Ltd. (SMM) and Sumitomo Corporation. Each partner
92
takes in kind its share of Morenci’s production. FMC purchased
98 million pounds of Morenci’s copper cathode from Sumitomo at
market prices for $244 million during 2015. FCX had a receivable
from Sumitomo of $10 million at December 31, 2015, and $11 million
at December 31, 2014.
In February 2016, FCX entered into a definitive agreement to sell
a 13 percent undivided interest in its Morenci unincorporated joint
venture to SMM (refer to Note 18 for further discussion).
NOTE 4. INVENTORIES, INCLUDING LONG-TERM MILL
AND LEACH STOCKPILES
The components of inventories follow:
December 31, 2015 2014
Current inventories:
Total materials and supplies, net a $ 1,869 $ 1,886
Mill stockpiles $ 137 $ 86
Leach stockpiles 1,587 1,828
Total current mill and leach stockpiles $ 1,724 $ 1,914
Raw materials (primarily concentrate) $ 220 $ 288
Work-in-process 108 174
Finished goods 867 1,099
Total product inventories $ 1,195 $ 1,561
Long-term inventories:
Mill stockpiles $ 480 $ 360
Leach stockpiles 1,791 1,819
Total long-term inventoriesb $ 2 ,271 $ 2,179
a. Materials and supplies inventory was net of obsolescence reserves totaling
$29 million at December 31, 2015, and $20 million at December 31, 2014.
b. Estimated metals in stockpiles not expected to be recovered within the next 12 months.
FCX recorded charges for adjustments to inventory carrying
values of $338 million ($215 million for copper inventories and
$123 million for molybdenum inventories) for 2015, primarily
because of lower copper and molybdenum prices (refer to Note 16
for inventory adjustments by business segment).
NOTE 5. PROPERTY, PLANT, EQUIPMENT AND MINING
DEVELOPMENT COSTS, NET
The components of net property, plant, equipment and mining
development costs follow:
December 31, 2015 2014
Proven and probable mineral reserves $ 4,663 $ 4,651
VBPP 1,037 1,042
Mining development and other 5,184 4,712
Buildings and infrastructure 7,451 5,100
Machinery and equipment 13,759 11,251
Mobile equipment 4,158 3,926
Construction in progress 3,999 6,802
Property, plant, equipment and mining
development costs 40,251 37,484
Accumulated depreciation, depletion and amortization (12,742) (11,264)
Property, plant, equipment and mining
development costs, net $ 27,509 $ 2 6,220

FCX recorded $2.2 billion for VBPP in connection with the FMC
acquisition in 2007 and transferred $10 million to proven and
probable mineral reserves during 2015, $2 million during 2014 and
$784 million prior to 2014. Cumulative impairments of VBPP total
$485 million, which were primarily recorded in 2008.
Capitalized interest, which primarily related to FCX’s
mining operations’ capital projects, totaled $157 million in 2015,
$148 million in 2014 and $105 million in 2013.
Because of a decline in commodity prices, FCX made
adjustments to its operating plans for its mining operations in the
third and fourth quarters of 2015. Although FCX’s long-term
strategy of developing its mining resources to their full potential
remains in place, the decline in copper and molybdenum prices
has limited FCX’s ability to invest in growth projects and caused
FCX to make adjustments to its near-term plans by revising its
strategy to protect liquidity while preserving its mineral resources
and growth options for the longer term. Accordingly, operating
plans were revised primarily to reflect: (a) the suspension of
mining operations at the Miami mine in Arizona; (b) a 50 percent
reduction in mining rates at the Tyrone mine in New Mexico;
(c) the suspension of production at the Sierrita mine in Arizona;
(d) adjustments to mining rates at other North America copper
mines; (e) an approximate 50 percent reduction in mining and
stacking rates at the El Abra mine in Chile; (f) an approximate
65 percent reduction in molybdenum production volumes at the
Henderson molybdenum mine in Colorado; (g) capital cost
reductions, including project deferrals associated with future
development and expansion opportunities at the Tenke
Fungurume minerals district in the DRC; and (h) reductions in
operating, administrative and exploration costs, including
workforce reductions.
In connection with the decline in copper and molybdenum
prices and the revised operating plans discussed above, FCX
evaluated its long-lived assets (other than indefinite-lived intangible
assets) for impairment during 2015 and as of December 31, 2015,
as described in Note 1. FCX’s evaluations of its copper mines at
December 31, 2015, were based on near-term price assumptions
reflecting prevailing copper future prices, which ranged from
approximately $2.15 per pound to $2.17 per pound for COMEX
and from $2.13 per pound to $2.16 per pound for LME, and a
long-term average price of $3.00 per pound. FCX’s evaluations of
its molybdenum mines at December 31, 2015, were based on
near-term price assumptions that are consistent with current
market prices for molybdenum and a long-term average price of
$10.00 per pound.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
FCX’s evaluations of long-lived assets (other than indefinite-
lived intangible assets) resulted in the recognition of a charge to
production costs for the impairment of the Tyrone mine totaling
$37 million in 2015, net of a revision to Tyrone’s ARO.
NOTE 6. OTHER ASSETS
The components of other assets follow:
December 31, 2015 2014
a
Disputed tax assessments:
Cerro Verde $ 254 $ 232
PT-FI 209 279
Intangible assetsb 317 334
Investments:
Assurance bondc 118 115
PT Smeltingd 112 107
Available-for-sale securities 47 46
Other 62 60
Long-term receivable for taxese 280 63
Long-lead equipment 187 43
Loan to a DRC public electric utility 174 164
Legally restricted funds f 171 172
Deferred drillship costs 81 113
Rio Tinto’s share of ARO 49 50
Loan to Gécamines (related party) 39 37
Other 142 141
Total other assets $ 2 ,242 $ 1,956
a. Refer to Note 12 for further discussion.
b. Intangible assets were net of accumulated amortization totaling $61 million at
December 31, 2015, and $62 million at December 31, 2014.
c. Relates to PT-FI’s commitment for smelter development in Indonesia (refer to Note 13
for further discussion).
d. FCX’s 25 percent ownership in PT Smelting (smelter and refinery in Gresik, Indonesia)
is recorded using the equity method. Amounts were reduced by unrecognized profits
on sales from PT-FI to PT Smelting totaling $14 million at December 31, 2015, and
$24 million at December 31, 2014. Trade accounts receivable from PT Smelting totaled
$160 million at December 31, 2015, and $182 million at December 31, 2014.
e. Includes tax overpayments and refunds not expected to be realized within the next
12 months (primarily at PT-FI, Cerro Verde and Tenke).
f. Includes $169 million at December 31, 2015, and $168 million at December 31, 2014, for
AROs related to properties in New Mexico (refer to Note 12 for further discussion).
NOTE 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Additional information regarding accounts payable and accrued
liabilities follows:
December 31, 2015 2014
Accounts payable $ 2 ,342 $ 2,439
Salaries, wages and other compensation 232 373
Other accrued taxes 202 137
Accrued interest a 165 166
Pension, postretirement, postemployment and
other employee benefitsb 132 106
Oil and gas royalty and revenue payable 53 76
Deferred revenue 48 105
Other 181 251
Total accounts payable and accrued liabilities $ 3 ,355 $ 3,653
a. Third-party interest paid, net of capitalized interest, was $570 million in 2015,
$637 million in 2014 and $397 million in 2013.
b. Refer to Note 9 for long-term portion.
2015 ANNUAL REPORT 93
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 8. DEBT
FCX’s debt at December 31, 2015, included additions of $210 million
for unamortized fair value adjustments (primarily from the 2013 oil
and gas acquisitions), and is net of reductions of $129 million for
unamortized net discounts and unamortized debt issuance costs;
and at December 31, 2014, included additions of $240 million for
unamortized fair value adjustments, and is net of reductions of
$143 million for unamortized net discounts and unamortized debt
issuance costs. The components of debt follow:
December 31, 2015 2014
Bank term loan $ 3,032 $ 3,036
Revolving credit facility — —
Lines of credit 442 474
Cerro Verde credit facility 1,781 402
Cerro Verde shareholder loans 259 —
Senior notes and debentures:
Issued by FCX:
2.15% Senior Notes due 2017 499 498
2.30% Senior Notes due 2017 747 745
2.375% Senior Notes due 2018 1,495 1,493
3.100% Senior Notes due 2020 995 993
4.00% Senior Notes due 2021 594 593
3.55% Senior Notes due 2022 1,987 1,985
3.875% Senior Notes due 2023 1,987 1,986
4.55% Senior Notes due 2024 843 842
5.40% Senior Notes due 2034 788 787
5.450% Senior Notes due 2043 1,973 1,972
Issued by Freeport-McMoRan Oil & Gas LLC
(FM O&G LLC):
6.125% Senior Notes due 2019 251 255
6½% Senior Notes due 2020 662 670
6.625% Senior Notes due 2021 281 284
6.75% Senior Notes due 2022 488 493
6 7/8 % Senior Notes due 2023 857 866
Issued by FMC:
71/8% Debentures due 2027 115 115
9 1/2% Senior Notes due 2031 128 129
6 1/8% Senior Notes due 2034 116 116
Other (including equipment capital leases and
other short-term borrowings) 108 115
Total debt 20,428 18,849
Less current portion of debt (649) (478)
Long-term debt $ 19,779 $ 18,371
Bank Term Loan. In February 2013, FCX entered into an agreement
for a $4.0 billion unsecured bank term loan (Term Loan) in
connection with the acquisitions of PXP and MMR. Upon closing
the PXP acquisition, FCX borrowed $4.0 billion under the Term
Loan, and FM O&G LLC (a wholly owned subsidiary of FM O&G
and the successor entity of PXP) joined the Term Loan as a
borrower. In February and December 2015, FCX’s Term Loan was
modified to amend the maximum total leverage ratio. In addition,
in conjunction with the February 2015 amendment, the Term Loan
amortization schedule was extended such that, as amended,
the Term Loan’s scheduled payments total $205 million in 2016,
$272 million in 2017, $1.0 billion in 2018, $313 million in 2019 and
$1.3 billion in 2020, compared with the previous amortization
schedule of $650 million in 2016, $200 million in 2017 and
94
$2.2 billion in 2018. At FCX’s option, the Term Loan bears interest
at either an adjusted London Interbank Offered Rate (LIBOR)
or an alternate base rate (ABR) (as defined under the Term Loan
agreement) plus a spread determined by reference to FCX’s
credit ratings (LIBOR plus 1.75 percent or ABR plus 0.75 percent at
December 31, 2015; as of February 12, 2016, LIBOR plus 2.25 percent
or ABR plus 1.25 percent). The interest rate on the Term Loan
was 2.18 percent at December 31, 2015. In February 2016, the Term
Loan was amended (refer to Note 18 for further discussion).
Revolving Credit Facility. In May 2014, FCX, PT-FI and FM O&G LLC
amended the senior unsecured $3.0 billion revolving credit
facility to extend the maturity date one year to May 31, 2019, and
increase the aggregate facility amount from $3.0 billion to
$4.0 billion, with $500 million available to PT-FI. FCX, PT-FI and
FM O&G LLC had entered into the $3.0 billion revolving credit
facility on May 31, 2013 (upon completion of the acquisition of
PXP). In February and December 2015, FCX modified the revolving
credit facility to amend the maximum total leverage ratio. At
December 31, 2015, FCX had no borrowings outstanding and
$36 million of letters of credit issued under the revolving credit
facility, resulting in availability of approximately $4 billion, of
which $1.5 billion could be used for additional letters of credit.
In February 2016, the revolving credit facility was amended
(refer to Note 18 for further discussion).
Interest on the revolving credit facility (LIBOR plus 1.75 percent
or ABR plus 0.75 percent at December 31, 2015; as of February 12,
2016, LIBOR plus 2.25 percent or ABR plus 1.25 percent) is
determined by reference to FCX’s credit ratings.
Lines of Credit. At December 31, 2015, FCX had $442 million
outstanding on its uncommitted and short-term lines of credit
with certain financial institutions. These unsecured lines of credit
allow FCX to borrow at a spread over LIBOR or the respective
financial institution’s cost of funds with terms and pricing that
are generally more favorable than FCX’s revolving credit facility.
The weighted-average effective interest rate on the lines of
credit was 1.36 percent at December 31, 2015, and 1.29 percent
at December 31, 2014.
Cerro Verde Credit Facility. In March 2014, Cerro Verde entered
into a five-year, $1.8 billion senior unsecured credit facility that is
nonrecourse to FCX and the other shareholders of Cerro Verde.
The credit facility allows for term loan borrowings up to the full
amount of the facility, less any amounts issued and outstanding
under a $500 million letter of credit sublimit. Interest on amounts
drawn under the term loan is based on LIBOR plus a spread
(2.40 percent at December 31, 2015) based on Cerro Verde’s total
net debt to EBITDA ratio as defined in the agreement. At
December 31, 2015, term loan borrowings under the facility
totaled $1.8 billion and were used to fund a portion of Cerro
Verde’s expansion project and for Cerro Verde’s general corporate
purposes. The credit facility amortizes in four installments in
amounts necessary for the aggregate borrowings and outstanding
letters of credit not to exceed 85 percent of the $1.8 billion
commitment on September 30, 2017, 70 percent on March 31, 2018,

and 35 percent on September 30, 2018, with the remaining balance
due on the maturity date of March 10, 2019. At December 31, 2015,
no letters of credit were issued under Cerro Verde’s credit facility.
The interest rate on Cerro Verde’s credit facility was 2.82 percent
at December 31, 2015.
Cerro Verde Shareholder Loans. In December 2014, Cerro Verde
entered into loan agreements with its largest shareholders for
borrowings up to $800 million. Cerro Verde can designate all or a
portion of the shareholder loans as subordinated. If the loans
are not designated as subordinated, they bear interest at LIBOR
plus the current spread on Cerro Verde’s credit facility. If they are
designated as subordinated, they bear interest at the same rate
plus 0.5 percent. The loans mature on December 22, 2019, unless
at that time there is senior financing associated with the Cerro
Verde expansion project that is senior to the shareholder loans, in
which case the shareholder loans mature two years following the
maturity of the senior financing. During 2015, Cerro Verde
borrowed $600 million under these shareholder loans (including
$341 million from FMC, which is eliminated in consolidation).
Senior Notes issued by FCX. In November 2014, FCX sold
$750 million of 2.30% Senior Notes due 2017, $600 million of
4.00% Senior Notes due 2021, $850 million of 4.55% Senior Notes
due 2024 and $800 million of 5.40% Senior Notes due 2034 for
total net proceeds of $2.97 billion. The 2.30% Senior Notes and
the 4.00% Senior Notes are redeemable in whole or in part, at the
option of FCX, at a make-whole redemption price. The 4.55%
Senior Notes are redeemable in whole or in part, at the option of
FCX, at a make-whole redemption price prior to August 14, 2024,
and thereafter at 100 percent of principal. The 5.40% Senior Notes
are redeemable in whole or in part, at the option of FCX, at a
make-whole redemption price prior to May 14, 2034, and
thereafter at 100 percent of principal. FCX used the net proceeds
from these senior notes to repay certain of its outstanding debt.
In March 2013, in connection with the financing of FCX’s
acquisitions of PXP and MMR, FCX issued $6.5 billion of
unsecured senior notes in four tranches. FCX sold $1.5 billion of
2.375% Senior Notes due March 2018, $1.0 billion of 3.100%
Senior Notes due March 2020, $2.0 billion of 3.875% Senior Notes
due March 2023 and $2.0 billion of 5.450% Senior Notes due
March 2043 for total net proceeds of $6.4 billion. The 2.375%
Senior Notes and the 3.100% Senior Notes are redeemable in whole
or in part, at the option of FCX, at a make-whole redemption price.
The 3.875% Senior Notes are redeemable in whole or in part,
at the option of FCX, at a make-whole redemption price prior to
December 15, 2022, and thereafter at 100 percent of principal. The
5.450% Senior Notes are redeemable in whole or in part, at the
option of FCX, at a make-whole redemption price prior to
September 15, 2042, and thereafter at 100 percent of principal.
In February 2012, FCX sold $500 million of 2.15% Senior Notes
due 2017 and $2.0 billion of 3.55% Senior Notes due 2022 for
total net proceeds of $2.47 billion. The 2.15% Senior Notes are
redeemable in whole or in part, at the option of FCX, at a make-
whole redemption price prior to the redemption date. The
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
3.55% Senior Notes are redeemable in whole or in part, at the
option of FCX, at a make-whole redemption price prior to
December 1, 2021, and thereafter at 100 percent of principal.
These senior notes rank equally with FCX’s other existing and
future unsecured and unsubordinated indebtedness.
Senior Notes issued by FM O&G LLC. In May 2013, in connection
with the acquisition of PXP, FCX assumed unsecured senior
notes with a stated value of $6.4 billion, which was increased
by $716 million to reflect the acquisition-date fair market value
of these senior notes. After a number of redemptions, as
of December 31, 2015, the stated value of these notes totaled
$2.3 billion, which was increased by $197 million to reflect the
remaining unamortized acquisition-date fair market value
adjustments that are being amortized over the term of the senior
notes and recorded as a reduction of interest expense. These
senior notes are redeemable in whole or in part, at the option of
FM O&G LLC, at make-whole redemption prices prior to the dates
stated below, and beginning on the dates stated below at
specified redemption prices. Upon completion of the acquisition
of PXP, FCX guaranteed these senior notes.
Debt Instrument Date
6.125% Senior Notes due 2019 June 15, 2016
6½% Senior Notes due 2020 November 15, 2015
6.625% Senior Notes due 2021 May 1, 2016
6.75% Senior Notes due 2022 February 1, 2017
6 7/8% Senior Notes due 2023 February 15, 2018
Additionally, in connection with the acquisition of MMR, FCX
assumed MMR’s 11.875% Senior Notes due 2014, 4% Convertible
Senior Notes due 2017 and 5¼% Convertible Senior Notes due
2013 with a total stated value of $558 million, which was increased
by $62 million to reflect the acquisition-date fair market value
of these obligations. During 2013, all of the 11.875% Senior Notes
due 2014 were redeemed, and holders of 4% Convertible
Senior Notes due 2017 and 5¼% Convertible Senior Notes due
2013 converted their notes into merger consideration totaling
$306 million, including cash payments of $270 million and
21.0 million royalty trust units with a fair value of $36 million at
the acquisition date. At December 31, 2015 and 2014, there were
no outstanding amounts in connection with MMR’s senior notes.
Early Extinguishments of Debt. A summary of debt
extinguishments during 2014 resulting from redemptions and
tender offers follows:
Purchase
Accounting
Principal Fair Value Book (Loss)
Amount Adjustments Value Gain
1.40% Senior Notes due 2015 $ 500 $ — $ 500 $ (1)
6.125% Senior Notes due 2019 513 40 553 (2)
8.625% Senior Notes due 2019 400 41 441 24
7.625% Senior Notes due 2020 300 32 332 14
6½% Senior Notes due 2020 883 79 962 10
6.625% Senior Notes due 2021 339 31 370 3
6.75% Senior Notes due 2022 551 57 608 8
6 7/8% Senior Notes due 2023 722 84 806 21
$ 4,208 $ 364 $ 4 ,572 $ 77
2015 ANNUAL REPORT 95
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
In addition, FCX recorded a loss on early extinguishment of debt
of $4 million associated with the modification of its revolving
credit facility in May 2014 and for fees related to the tender offers
in December 2014.
In 2013, FCX completed the following transactions that resulted
in a net loss on early extinguishment of debt of $35 million: (i) the
termination of its $9.5 billion acquisition bridge loan facility,
which was entered into in December 2012 to provide interim
financing for the acquisitions of PXP and MMR but was replaced
with other financing, that resulted in a loss of $45 million; (ii) the
repayment of the $3.9 billion outstanding under PXP’s amended
credit facility and the redemption of all of PXP’s 75/ 8 % Senior
Notes due 2018 for $415 million, which did not result in a gain or
loss; partially offset by (iii) the redemption of MMR’s remaining
outstanding 11.875% Senior Notes due 2014 for $299 million,
which resulted in a gain of $10 million.
Guarantees. In connection with the acquisition of PXP, FCX
guaranteed the PXP senior notes, and the guarantees by certain
PXP subsidiaries were released. Refer to Note 17 for a discussion
of FCX’s senior notes guaranteed by FM O&G LLC.
Restrictive Covenants. FCX’s Term Loan and revolving credit
facility contain customary affirmative covenants and
representations, and also contain a number of negative covenants
that, among other things, restrict, subject to certain exceptions,
the ability of FCX’s subsidiaries that are not borrowers or
guarantors to incur additional indebtedness (including guarantee
obligations) and FCX’s ability or the ability of FCX’s subsidiaries
to: create liens on assets; enter into sale and leaseback
transactions; engage in mergers, liquidations and dissolutions;
and sell all or substantially all of the assets of FCX and its
subsidiaries, taken as a whole. FCX’s Term Loan and revolving
credit facility also contain financial ratios governing maximum
total leverage and minimum interest coverage. Following the
December 2015 amendment, FCX’s leverage ratio (Net Debt/EBITDA,
as defined in the credit agreement) cannot exceed 5.5x at
December 31, 2015, 5.9x for the quarters ending March 31, 2016,
and June 30, 2016, and declining to 5.0x by the quarter ending
December 31, 2016, 4.25x in 2017 and 3.75x thereafter. The
December 2015 amendment also increases the interest rate
spreads under specified conditions. Additionally, the Term Loan’s
December 2015 amendment requires prepayment of the Term
Loan with 50 percent of the net proceeds of certain asset
dispositions. In February 2016, the Term Loan and revolving credit
facility were amended (refer to Note 18 for further discussion).
FCX’s senior notes contain limitations on liens. At December 31,
2015, FCX was in compliance with all of its covenants.
Maturities. Maturities of debt instruments based on the
principal amounts and terms outstanding at December 31, 2015,
total $649 million in 2016, $1.8 billion in 2017, $3.4 billion in 2018,
$1.4 billion in 2019, $2.9 billion in 2020 and $10.2 billion thereafter.
96
NOTE 9. OTHER LIABILITIES, INCLUDING
EMPLOYEE BENEFITS
Information regarding other liabilities follows:
December 31, 2015 2014
Pension, postretirement, postemployment and
other employment benefitsa $ 1,260 $ 1,430
Provision for tax positions 152 157
Legal matters 77 63
Insurance claim reserves 59 56
Other 108 155
Total other liabilities $ 1,656 $ 1,861
a. Refer to Note 7 for current portion.
Pension Plans. Following is a discussion of FCX’s pension plans.
FMC Plans. FMC has U.S. trusteed, non-contributory pension
plans covering substantially all of its U.S. employees and some
employees of its international subsidiaries hired before 2007.
The applicable FMC plan design determines the manner in which
benefits are calculated for any particular group of employees.
Benefits are calculated based on final average monthly
compensation and years of service or based on a fixed amount
for each year of service. Non-bargained FMC employees hired
after December 31, 2006, are not eligible to participate in the FMC
U.S. pension plan.
FCX’s funding policy for these plans provides that contributions
to pension trusts shall be at least equal to the minimum funding
requirements of the Employee Retirement Income Security Act of
1974, as amended, for U.S. plans; or, in the case of international
plans, the minimum legal requirements that may be applicable in
the various countries. Additional contributions also may be made
from time to time.
FCX’s policy for determining asset-mix targets for the FMC plan
assets held in a master trust (Master Trust) includes the periodic
development of asset and liability studies to determine expected
long-term rates of return and expected risk for various investment
portfolios. FCX’s retirement plan administration and investment
committee considers these studies in the formal establishment of
asset-mix targets. FCX’s investment objective emphasizes the
need to maintain a well-diversified investment program through
both the allocation of the Master Trust assets among asset classes
and the selection of investment managers whose various styles
are fundamentally complementary to one another and serve to
achieve satisfactory rates of return. Diversification, by asset class
and by investment manager, is FCX’s principal means of reducing
volatility and exercising prudent investment judgment. FCX’s
present target asset allocation approximates 43 percent equity
investments (primarily global equities), 46 percent fixed income
(primarily long-term treasury STRIPS or “separate trading or
registered interest and principal securities”; long-term U.S.
treasury/agency bonds; global fixed income securities; long-term,

high-credit quality corporate bonds; high-yield and emerging
markets fixed income securities; and fixed income debt securities)
and 11 percent alternative investments (private real estate, real
estate investment trusts and private equity).
The expected rate of return on plan assets is evaluated at least
annually, taking into consideration asset allocation, historical
returns on the types of assets held in the Master Trust and the
current economic environment. Based on these factors, FCX
expects the pension assets will earn an average of 7.25 percent
per annum beginning January 1, 2016. The 7.25 percent
estimation was based on a passive return on a compound basis of
6.75 percent and a premium for active management of 0.5 percent
reflecting the target asset allocation and current investment array.
For estimation purposes, FCX assumes the long-term asset
mix for these plans generally will be consistent with the current
mix. Changes in the asset mix could impact the amount of
recorded pension income or expense, the funded status of the
plans and the need for future cash contributions. A lower-than-
expected return on assets also would decrease plan assets and
increase the amount of recorded pension expense in future years.
When calculating the expected return on plan assets, FCX uses
the market value of assets.
Among the assumptions used to estimate the pension benefit
obligation is a discount rate used to calculate the present
value of expected future benefit payments for service to date.
The discount rate assumption for FCX’s U.S. plans is designed to
reflect yields on high-quality, fixed-income investments for a
given duration. The determination of the discount rate for these
plans is based on expected future benefit payments for service to
date together with the Mercer Pension Discount Curve — Above
Mean Yield. The Mercer Pension Discount Curve — Above Mean
Yield is constructed from the bonds in the Mercer Pension
Discount Curve that have a yield higher than the regression mean
yield curve. The Mercer Pension Discount Curve consists of spot
(i.e., zero coupon) interest rates at one-half year increments for
each of the next 30 years and is developed based on pricing and
yield information for high-quality corporate bonds. Changes
in the discount rate are reflected in FCX’s benefit obligation and,
therefore, in future pension costs.
Other FCX Plans. In 2004, FCX established an unfunded
Supplemental Executive Retirement Plan (SERP) for its two most
senior executive officers. The SERP provides for retirement
benefits payable in the form of a joint and survivor annuity or an
equivalent lump sum. The annuity will equal a percentage of
the executive’s highest average compensation for any consecutive
three-year period during the five years immediately preceding
25 years of credited service. The SERP benefit will be reduced by
the value of all benefits paid or due under any defined benefit
or defined contribution plan sponsored by FM Services Company,
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
FCX’s wholly owned subsidiary, FCX or its predecessor, but
not including accounts funded exclusively by deductions from
participant’s pay. One of the executive officers retired in
December 2015 and will receive a lump sum payment of $27 million
in 2016.
PT-FI Plan. PT-FI has a defined benefit pension plan denominated
in Indonesian rupiah covering substantially all of its Indonesian
national employees. PT-FI funds the plan and invests the assets in
accordance with Indonesian pension guidelines. The pension
obligation was valued at an exchange rate of 13,726 rupiah to one
U.S. dollar on December 31, 2015, and 12,378 rupiah to one U.S.
dollar on December 31, 2014. Indonesian labor laws require that
companies provide a minimum level of benefits to employees
upon employment termination based on the reason for
termination and the employee’s years of service. PT-FI’s pension
benefit disclosures include benefits related to this law. PT-FI’s
expected rate of return on plan assets is evaluated at least
annually, taking into consideration its long-range estimated return
for the plan based on the asset mix. Based on these factors, PT-FI
expects its pension assets will earn an average of 7.75 percent per
annum beginning January 1, 2016. The discount rate assumption
for PT-FI’s plan is based on the Mercer Indonesian zero coupon
bond yield curve derived from the Indonesian Government
Security Yield Curve. Changes in the discount rate are reflected in
PT-FI’s benefit obligation and, therefore, in future pension costs.
Plan Information. FCX uses a measurement date of December 31
for its plans. Information for those plans where the accumulated
benefit obligations exceed the fair value of plan assets follows:
December 31, 2015 2014
Projected benefit obligation $ 2,139 $ 2 ,221
Accumulated benefit obligation 2,037 2,090
Fair value of plan assets 1,399 1,433
2015 ANNUAL REPORT 97
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Information on the FCX (including FMC’s plans and FCX’s SERP
plans) and PT-FI plans as of December 31 follows:
FCX PT-FI
2015 2014 2015 2014
Change in benefit obligation:
Benefit obligation at beginning
of year $ 2,179 $ 1,871 $ 318 $ 259
Service cost 36 30 26 22
Interest cost 87 92 23 23
Actuarial (gains) losses (118) 278 (7) 30
Foreign exchange gains (2) (2) (32) (7)
Special retirement benefitsa 22 — — —
Benefits paid (100) (90) (10) (9)
Benefit obligation at end of year 2,104 2,179 318 318
Change in plan assets:
Fair value of plan assets at
beginning of year 1,416 1,350 185 124
Actual return on plan assets (26) 151 6 20
Employer contributionsb 90 6 42 55
Foreign exchange losses (1) (1) (19) (5)
Benefits paid (100) (90) (10) (9)
Fair value of plan assets at end
of year 1,379 1,416 204 185
Funded status $ (725) $ (763) $ (114) $ (133)
Accumulated benefit obligation $ 2,001 $ 2,048 $ 175 $ 168
Weighted-average assumptions
used to determine benefit obligations:
Discount rate 4.60% 4.10% 9.00% 8.25%
Rate of compensation increase 3.25% 3.25% 9.40% 9.00%
Balance sheet classification of
funded status:
Other assets $ 8 $ 8 $ — $ —
Accounts payable and
accrued liabilities (35) (4) — —
Other liabilities (698) (767) (114) (133)
Total $ (725) $ (763) $ (114) $ (133)
a. Resulted from revised mine operating plans and reductions in the workforce (refer to
Note 5 for further discussion).
b. Employer contributions for 2016 are expected to approximate $38 million for the FCX
plans and $38 million for the PT-FI plan (based on a December 31, 2015, exchange rate
of 13,726 Indonesian rupiah to one U.S. dollar).
The weighted-average assumptions used to determine net periodic
benefit cost and the components of net periodic benefit cost
for FCX’s pension plans for the years ended December 31 follow:
The weighted-average assumptions used to determine net periodic
benefit cost and the components of net periodic benefit cost
for PT-FI’s pension plan for the years ended December 31 follow:
2015 2014 2013
Weighted-average assumptions:
Discount rate 8.25% 9.00% 6.25%
Expected return on plan assets 7.75% 7.75% 7.50%
Rate of compensation increase 9.00% 9.00% 8.00%
Service cost $ 26 $ 22 $ 20
Interest cost 23 23 14
Expected return on plan assets (14) (10) (10)
Amortization of prior service cost 3 3 —
Amortization of net actuarial loss 6 8 8
Net periodic benefit cost $ 44 $ 46 $ 32
Included in accumulated other comprehensive loss are the
following amounts that have not been recognized in net periodic
pension cost as of December 31:
2015 2014
After Taxes and After Taxes and
Before Noncontrolling Before Noncontrolling
Taxes Interests Taxes Interests
Prior service costs $ 23 $ 12 $ 28 $ 15
Net actuarial loss 697 426 749 456
$ 720 777 $
$ 438 $ 471
Actuarial losses in excess of 10 percent of the greater of the
projected benefit obligation or market-related value of plan assets
are amortized over the expected average remaining future
service period of the current active participants. The amount
expected to be recognized in 2016 net periodic pension cost for
actuarial losses is $47 million ($29 million net of tax and
noncontrolling interests).
FCX does not expect to have any plan assets returned to it in
2016. Plan assets are classified within a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level 1), then to significant observable inputs (Level 2) and the
lowest priority to significant unobservable inputs (Level 3).

2015 2014 2013

Weighted-average assumptions:a
Discount rate 4.10% 5.00% 4.10%
Expected return on plan assets 7.25% 7.50% 7.50%
Rate of compensation increase 3.25% 3.75% 3.75%
Service cost $ 36 $ 30 $ 30
Interest cost 87 92 77
Expected return on plan assets (102) (98) (95)
Amortization of prior service credit — (1) —
Amortization of net actuarial losses 45 28 38
Special retirement benefits 22 — —
Net periodic benefit cost $ 88 $ 51 $ 50
a. The assumptions shown relate only to the FMC plans.

98

A summary of the fair value hierarchy for pension plan assets
associated with the FCX plans follows:
Fair Value at December 31, 2015
Total Level 1 Level 2 Level 3
Commingled/collective funds:
Global equity $ 399 $ — $ 399 $ —
Fixed income securities 129 — 129 —
Global fixed income securities 101 — 101 —
Real estate property 66 — — 66
Emerging markets equity 60 — 60 —
U.S. small-cap equity 56 — 56 —
International small-cap equity 56 — 56 —
U.S. real estate securities 55 — 55 —
Short-term investments 25 — 25 —
Fixed income:
Government bonds 215 — 215 —
Corporate bonds 145 — 145 —
Private equity investments 31 — — 31
Other investments 39 1 38 —
Total investments 1,377 $ 1 $
1,279 $ 97
Cash and receivables 6
Payables (4)
Total pension plan net assets $ 1,379
Fair Value at December 31, 2014
Total Level 1 Level 2 Level 3
Commingled/collective funds:
Global equity $
487 $ — $ 487 $ —
Global fixed income securities 106 — 106 —
Fixed income securities 99 — 99 —
U.S. small-cap equity 69 — 69 —
U.S. real estate securities 54 — 54 —
Real estate property 54 — — 54
Short-term investments 8 — 8 —
Open-ended mutual funds:
Emerging markets equity 38 38 — —
Mutual funds:
Emerging markets equity 25 25 — —
Fixed income:
Government bonds 244 — 244 —
Corporate bonds 148 — 148 —
Private equity investments 39 — — 39
Other investments 35 — 35 —
Total investments 1,406 $ 63 $ 1,250 $ 93
Cash and receivables 19
Payables (9)
Total pension plan net assets $ 1,416
Following is a description of the pension plan asset categories
and the valuation techniques used to measure fair value. There
have been no changes to the techniques used to measure fair value.
Commingled/collective funds are managed by several fund
managers and are valued at the net asset value per unit of the fund.
For most of these funds, the majority of the underlying assets are
actively traded securities; however, the unit level is considered
to be at the fund level. These funds (except the real estate property
funds) require less than a month’s notice for redemptions and,
as such, are classified within Level 2 of the fair value hierarchy.
Real estate property funds are valued at net realizable value using
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
information from independent appraisal firms, who have
knowledge and expertise about the current market values of real
property in the same vicinity as the investments. Redemptions
of the real estate property funds are allowed once per quarter,
subject to available cash and, as such, are classified within Level 3
of the fair value hierarchy.
Fixed income investments include government and corporate
bonds held directly by the Master Trust or through commingled
funds. Fixed income securities are valued using a bid evaluation
price or a mid-evaluation price and, as such, are classified within
Level 2 of the fair value hierarchy. A bid evaluation price is an
estimated price at which a dealer would pay for a security.
A mid-evaluation price is the average of the estimated price at
which a dealer would sell a security and the estimated price
at which a dealer would pay for a security. These evaluations are
based on quoted prices, if available, or models that use
observable inputs.
Private equity investments are valued at net realizable value
using information from general partners and are classified within
Level 3 of the fair value hierarchy because of the inherent
restrictions on redemptions that may affect the ability to sell the
investments at their net asset value in the near term.
Open-ended mutual funds were managed by registered
investment companies and were valued at the daily published net
asset value of shares/units held. Because redemptions and
purchases of shares/units occur at the net asset value without any
adjustments to the published net asset value that was provided on
an ongoing basis (active-market criteria are met), these investments
were classified within Level 1 of the fair value hierarchy.
Mutual funds were valued at the closing price reported on the
active market on which the individual securities were traded and,
as such, are classified within Level 1 of the fair value hierarchy.
A summary of changes in the fair value of FCX’s Level 3 pension
plan assets for the years ended December 31 follows:
Real Private
Estate Equity
Property Investments Total
Balance at January 1, 2014 $ 47 $ 43 $ 90
Actual return on plan assets:
Realized gains 2 — 2
Net unrealized gains (losses) related to
assets still held at the end of the year 6 (1) 5
Purchases — 1 1
Sales (1) — (1)
Settlements, net — (4) (4)
Balance at December 31, 2014 54 39 93
Actual return on plan assets:
Realized gains 2 — 2
Net unrealized gains (losses) related to
assets still held at the end of the year 11 (5) 6
Purchases — 1 1
Sales (1) — (1)
Settlements, net — (4) (4)
Balance at December 31, 2015 $ 66 $ 31 $ 97
2015 ANNUAL REPORT 99
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

A summary of the fair value hierarchy for pension plan assets Postretirement and Other Benefits. FCX also provides postretirement
associated with the PT-FI plan follows: medical and life insurance benefits for certain U.S. employees
and, in some cases, employees of certain international subsidiaries.
Fair Value at December 31, 2015
These postretirement benefits vary among plans, and many
Total Level 1 Level 2 Level 3
plans require contributions from retirees. The expected cost of
Common stocks $ 43 $ 43 $ — $ —
providing such postretirement benefits is accrued during the
Government bonds 41 41 — —
Mutual funds 12 12 — — years employees render service.
Total investments 96 $ 96 $ — $ — The benefit obligation (funded status) for the postretirement
a medical and life insurance benefit plans consisted of a current
Cash and receivables 108
Total pension plan net assets $ 204 portion of $15 million (included in accounts payable and accrued
liabilities) and a long-term portion of $144 million (included in
Fair Value at December 31, 2014 other liabilities) at December 31, 2015, and a current portion of
Total Level 1 Level 2 Level 3
$17 million and a long-term portion of $162 million at December 31,
Common stocks $ 43 $ 43 $ — $ — 2014. The discount rate used to determine the benefit obligation
Government bonds 27 27 — — for these plans, which was determined on the same basis as
Mutual funds 14 14 — —
FCX’s pension plans, was 4.10 percent at December 31, 2015, and
Total investments 84 $ 84 $ — $ —
3.60 percent at December 31, 2014. Expected benefit payments
Cash and receivablesa 101 for these plans total $15 million for 2016, $16 million for 2017,
Total pension plan net assets $ 185
$14 million for 2018, $15 million for 2019, $14 million for 2020 and
a. Cash consists primarily of short-term time deposits. $59 million for 2021 through 2025.
The net periodic benefit cost charged to operations for FCX’s
Following is a description of the valuation techniques used for
postretirement benefits totaled $6 million in 2015, $7 million in
pension plan assets measured at fair value associated with the
2014 and $9 million in 2013 (primarily for interest costs). The
PT-FI plan. There have been no changes to the techniques used to
discount rate used to determine net periodic benefit cost and the
measure fair value.
components of net periodic benefit cost for FCX’s postretirement
Common stocks, government bonds and mutual funds are
benefits was 3.60 percent in 2015, 4.30 percent in 2014 and
valued at the closing price reported on the active market on which
3.50 percent in 2013. The medical-care trend rates assumed the
the individual securities are traded and, as such, are classified
first year trend rate was 7.50 percent at December 31, 2015,
within Level 1 of the fair value hierarchy.
which declines over the next 15 years with an ultimate trend rate
The techniques described above may produce a fair value
of 4.25 percent.
calculation that may not be indicative of net realizable value or
FCX has a number of postemployment plans covering severance,
reflective of future fair values. Furthermore, while FCX believes its
long-term disability income, continuation of health and life
valuation techniques are appropriate and consistent with other
insurance coverage for disabled employees or other welfare
market participants, the use of different techniques or
benefits. The accumulated postemployment benefit consisted of a
assumptions to determine the fair value of certain financial
current portion of $4 million (included in accounts payable and
instruments could result in a different fair value measurement at
accrued liabilities) and a long-term portion of $30 million (included
the reporting date.
in other liabilities) at December 31, 2015, and a current portion
The expected benefit payments for FCX’s and PT-FI’s pension
of $6 million and a long-term portion of $38 million at December
plans follow:
31, 2014. In connection with the retirement of one of its executive
FCX PT-FIa officers in December 2015, FCX recorded a charge to selling,
2016 $
155 $ 20 general and administrative expenses of $16 million.
2017 140 12 FCX also sponsors savings plans for the majority of its U.S.
2018 110 22
employees. The plans allow employees to contribute a portion of
2019 113 28
2020 115 37 their pre-tax income in accordance with specified guidelines.
2021 through 2025 610 264 These savings plans are principally qualified 401(k) plans for all

U.S. salaried and non-bargained hourly employees. In these
a. Based on a December 31, 2015, exchange rate of 13,726 Indonesian rupiah to one
U.S. dollar. plans, participants exercise control and direct the investment of

100

their contributions and account balances among various
investment options. FCX contributes to these plans at varying
rates and matches a percentage of employee pre-tax deferral
contributions up to certain limits, which vary by plan. For
employees whose eligible compensation exceeds certain levels,
FCX provides an unfunded defined contribution plan, which had
a liability balance of $78 million ($35 million included in accounts
payable and accrued liabilities and $43 million included in other
liabilities) at December 31, 2015, and $69 million (included in other
liabilities) at December 31, 2014.
The costs charged to operations for employee savings plans
totaled $98 million in 2015 (of which $13 million was capitalized to
oil and gas properties), $79 million in 2014 (of which $11 million
was capitalized to oil and gas properties) and $66 million in 2013
(of which $5 million was capitalized to oil and gas properties). FCX
has other employee benefit plans, certain of which are related to
FCX’s financial results, which are recognized in operating costs.
Restructuring Charges. Because of a decline in commodity
prices, FCX made adjustments to its operating plans for its mining
operations in the third and fourth quarters of 2015 (refer to Note 5
for further discussion). As a result of these revisions to its
operating plans, FCX recorded restructuring charges to production
costs in 2015 of $46 million primarily for employee severance
and benefit costs, and $22 million for special retirement benefits.
NOTE 10. STOCKHOLDERS’ EQUITY AND
STOCK-BASED COMPENSATION
FCX’s authorized shares of capital stock total 1.85 billion shares,
consisting of 1.8 billion shares of common stock and 50 million
shares of preferred stock.
Unrealized
Defined Losses on Translation
Benefit Plans Securities Adjustment Total
Balance at January 1, 2013 $ (507) $ (4) $ 5 $ (506)
Amounts arising during the perioda,b 67 (1) — 66
Amounts reclassifiedc 30 — 5 35
Balance at December 31, 2013 (410) (5) 10 (405)
Amounts arising during the perioda,b (162) (1) — (163)
Amounts reclassifiedc 24 — — 24
Balance at December 31, 2014 (548) (6) 10 (544)
Amounts arising during the perioda,b 3 — — 3
Amounts reclassifiedc 38 — — 38
Balance at December 31, 2015 $ (507) $ (6) $ 10 $ (503)
a. Includes net actuarial gains (losses), net of noncontrolling interest, totaling $126 million for 2013, $(252) million for 2014 and $(7) million for 2015. The year 2013 also included $33 million
for prior service costs.
b. Includes tax (provision) benefits totaling $(37) million for 2013, $89 million for 2014 and $2 million for 2015.
c. Includes amortization primarily related to actuarial losses, net of taxes of $17 million for 2013, $14 million for 2014 and $16 million for 2015.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Common Stock. In September 2015, FCX completed a $1.0 billion
at-the-market equity program and announced an additional
$1.0 billion at-the-market equity program. Through December 31,
2015, FCX sold 206 million shares of its common stock at an
average price of $9.53 per share under these programs, which
generated gross proceeds of approximately $1.96 billion (net
proceeds of $1.94 billion after $20 million of commissions and
expenses). From January 1, 2016, through January 5, 2016, FCX
sold 4 million shares of its common stock, which generated
proceeds of $29 million (after $0.3 million of commissions and
expenses). FCX used the net proceeds for general corporate
purposes, including the repayment of amounts outstanding
under its revolving credit facility and other borrowings, and the
financing of working capital and capital expenditures.
The Board declared a supplemental cash dividend of $1.00
per share, which was paid in July 2013, and a one-time special
cash dividend of $0.1105 per share related to the settlement of the
shareholder derivative litigation (refer to Note 12 for further
discussion), which was paid in August 2015. In response to the
impact of lower commodity prices, the Board authorized a
decrease in the cash dividend on FCX’s common stock from an
annual rate of $1.25 per share to an annual rate of $0.20 per share
in March 2015, and then suspended the cash dividend in
December 2015. The declaration of dividends is at the discretion
of the Board and will depend on FCX’s financial results, cash
requirements, future prospects and other factors deemed relevant
by the Board.
Accumulated Other Comprehensive Loss. A summary of
changes in the balances of each component of accumulated other
comprehensive loss, net of tax follows:
2015 ANNUAL REPORT 101
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Stock Award Plans. FCX currently has awards outstanding under
various stock-based compensation plans. The stockholder-
approved 2006 Stock Incentive Plan (the 2006 Plan) provides for
the issuance of stock options, SARs, restricted stock, RSUs, PSUs
and other stock-based awards for up to 74 million common
shares. FCX’s stockholders approved amendments to the 2006
Plan in 2007 primarily to increase the number of shares available
for grants, and in 2010, to permit grants to outside directors. As of
December 31, 2015, 12.2 million shares were available for grant
under the 2006 Plan, and no shares were available under other plans.
In connection with the restructuring of an executive
employment arrangement, a special retention award of one
million RSUs was granted in December 2013. The RSUs are fully
vested and the related shares of common stock will be delivered
to the executive upon separation of service, along with a cash
payment for accumulated dividends. With respect to stock options
previously granted to this executive, such awards became fully
vested. With respect to performance-based awards previously
granted to this executive, the service requirements are considered
to have been satisfied, and the vesting of any such awards shall
continue to be contingent upon the achievement of all performance
conditions set forth in the award agreements. In connection with
the restructuring, FCX recorded a $37 million charge to selling,
general and administrative expenses in 2013.
Stock-Based Compensation Cost. Compensation cost charged
against earnings for stock-based awards for the years ended
December 31 follows:
2015 2014 2013
Selling, general and administrative expenses $ 67 $ 79 $ 145
Production and delivery 18 28 28
Capitalized costs 11 23 13
Total stock-based compensation 96 130 186
Less capitalized costs (11) (23) (13)
Tax benefit and noncontrolling interests’ share (32) (42) (66)
Impact on net (loss) income $ 53 $ 65 $ 107
Stock Options and SARs. Stock options granted under the plans
generally expire 10 years after the date of grant and vest in
25 percent annual increments beginning one year from the date
of grant. The award agreements provide that participants will
receive the following year’s vesting after retirement. Therefore,
on the date of grant, FCX accelerates one year of amortization for
retirement-eligible employees. Stock options granted prior to
February 2012 provide for accelerated vesting if there is a change
of control (as defined in the award agreements). Stock options
granted after that date provide for accelerated vesting only upon
certain qualifying terminations of employment within one year
following a change of control. SARs generally expire within five
102
years after the date of grant and vest in one-third annual
increments beginning one year from the date of grant. SARs are
similar to stock options, but are settled in cash rather than in
shares of common stock and are classified as liability awards.
A summary of options and SARs outstanding as of December 31,
2015, including 1,321,029 SARs, and activity during the year
ended December 31, 2015, follows:
Weighted-
Weighted- Average
Average Remaining Aggregate
Number of Exercise Price Contractual Intrinsic
Options and SARs Per Share Term (years) Value
Balance at January 1 45,929,739 $ 35.65
Granted 5,450,000 18.96
Exercised (195,326) 15.61
Expired/Forfeited (1,880,534) 30.15
Balance at December 31 4 9,303,879 34.10
4.8 $ —a
Vested and exercisable
at December 31 4 0,235,301 $ 35.78
4.0 $ —a
a. At December 31, 2015, all outstanding stock options and SARs have exercise prices
greater than the market price of FCX’s common stock.
The fair value of each stock option is estimated on the date of
grant using the Black-Scholes-Merton option valuation model.
The fair value of each SAR is determined using the Black-Scholes-
Merton option valuation model and remeasured at each reporting
date until the date of settlement. Expected volatility is based on
implied volatilities from traded options on FCX’s common stock
and historical volatility of FCX’s common stock. FCX uses
historical data to estimate future option and SAR exercises,
forfeitures and expected life. When appropriate, separate groups
of employees who have similar historical exercise behavior are
considered separately for valuation purposes. The expected
dividend rate is calculated using the annual dividend (excluding
supplemental dividends) at the date of grant. The risk-free interest
rate is based on Federal Reserve rates in effect for bonds with
maturity dates equal to the expected term of the option or SAR.
Information related to stock options during the years ended
December 31 follows:
2015 2014 2013
Weighted-average assumptions used
to value stock option awards:
Expected volatility 37.9% 36.6% 48.9%
Expected life of options (in years) 5.17 4.92 4.66
Expected dividend rate 4.5% 3.5% 3.3%
Risk-free interest rate 1.7% 1.7% 0.7%
Weighted-average grant-date fair value
(per share) $ 4.30 $ 7.43 $ 10.98
Intrinsic value of options exercised $ 1 $ 17 $ 10
Fair value of options vested $ 50 $ 76 $ 101

As of December 31, 2015, FCX had $31 million of total unrecognized
compensation cost related to unvested stock options expected
to be recognized over a weighted-average period of approximately
1.8 years.
Stock-Settled PSUs and RSUs. Beginning in 2014, FCX’s
executive officers were granted PSUs that vest after three years.
The final number of shares to be issued to the executive officers
will be based on FCX’s total shareholder return compared to the
total shareholder return of a peer group. The total grant date
target shares related to the PSU grants were 755 thousand in 2015
and 344 thousand in 2014, of which the executive officers will earn
from 0 percent to 200 percent.
Prior to 2014, the portion of each executive officer’s annual
bonus exceeding three times such officer’s base salary was to be
paid in performance-based RSUs. The performance-based RSUs
were a component of an annual incentive award pool that was
calculated as a percentage of FCX’s consolidated operating cash
flows adjusted for changes in working capital and other tax
payments for the preceding year. The performance-based RSUs
granted in 2013 as part of the 2012 annual bonus vest after
three years, subject to FCX attaining a five-year average return
on investment (a performance condition defined in the award
agreement) of at least 6 percent and subject to a 20 percent
reduction if FCX performs below a group of its peers as defined in
the award agreement.
All of FCX’s executive officers are retirement eligible, and for
the 2015 awards, FCX charged the cost of the PSU awards to
expense in the year of grant because they are non-forfeitable. For
the performance-based RSUs, the cost was charged to expense in
the year the related operating cash flows were generated, as
performance of services was only required in the calendar year
preceding the date of grant.
In February 2015 and 2014, FCX granted RSUs that vest over a
period of three years to certain employees, and in February 2013,
FCX granted RSUs that cliff vest at the end of three years to
certain employees.
FCX also grants other RSUs that generally vest over a period of
four years to its directors. The fair value of the RSUs is amortized
over the four-year vesting period or the period until the director
becomes retirement eligible, whichever is shorter. Upon a
director’s retirement, all of their unvested RSUs immediately vest.
For retirement-eligible directors, the fair value of RSUs is
recognized in earnings on the date of grant.
The award agreements provide for accelerated vesting of all
RSUs held by directors if there is a change of control (as defined
in the award agreements) and for accelerated vesting of all RSUs
held by employees if they experience a qualifying termination
within one year following a change of control.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Dividends attributable to RSUs and PSUs accrue and are paid if
the award vests. In addition, for those awards granted prior to
2015, interest accrues on accumulated dividends and is paid if the
stock-settled RSUs vest. A summary of outstanding stock-settled
RSUs and PSUs as of December 31, 2015, and activity during the
year ended December 31, 2015, follows:
Weighted-
Average
Grant-Date Aggregate
Number of Fair Value Intrinsic
Awards Per Award Value
Balance at January 1 5,805,145 $ 33.57
Granted 2,729,750 16.77
Vested (1,150,589) 34.10
Forfeited (164,006) 34.35
Balance at December 31 7,220,300 27.12 $ 49
The total fair value of stock-settled RSUs and PSUs granted was
$46 million during 2015, $67 million during 2014 and $125 million
during 2013. The total intrinsic value of stock-settled RSUs
vested was $22 million during 2015, $15 million during 2014 and
$12 million during 2013. As of December 31, 2015, FCX had
$28 million of total unrecognized compensation cost related to
unvested stock-settled RSUs expected to be recognized over
approximately 1.4 years.
Cash-Settled PSUs and RSUs. Beginning in 2015, certain
members of FM O&G’s senior management were granted
cash-settled PSUs that vest over three years. The cash-settled
PSUs contain performance conditions linked to oil and gas
production and FCX’s total shareholder return compared to the
total shareholder return of a peer group (each of which is weighted
50 percent). The total grant date target shares related to the 2015
cash-settled PSU grant were 582 thousand, of which FM O&G’s
senior management will earn from 50 percent to 200 percent.
Cash-settled RSUs are similar to stock-settled RSUs, but are
settled in cash rather than in shares of common stock. These
cash-settled RSUs generally vest over periods ranging from three
to five years of service. The award agreements for cash-settled
RSUs provide for accelerated vesting upon certain qualifying
terminations of employment within one year following a change
of control (as defined in the award agreements).
The cash-settled PSUs and RSUs are classified as liability
awards, and the fair value of these awards is remeasured each
reporting period until the vesting dates.
2015 ANNUAL REPORT 103
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Dividends attributable to cash-settled RSUs and PSUs accrue
and are paid if the award vests. In addition, for those awards
granted prior to 2015, interest accrues on accumulated dividends
and is paid if the cash-settled RSUs vest. A summary of
outstanding cash-settled RSUs and PSUs as of December 31, 2015,
and activity during the year ended December 31, 2015, follows:
Weighted-
Average In the absence of these specifically identifiable needs, FCX would
Grant-Date Aggregate
Number of Fair Value Intrinsic
Awards Per Award Value
Balance at January 1 3,587,564 $ 30.99
Granted 2,366,715 18.68
Vested (1,196,395) 30.99
Forfeited (145,348) 24.21
Balance at December 31 4,612,536 24.89 $ 31
The total grant-date fair value of cash-settled RSUs and PSUs
granted was $44 million during 2015, $68 million during 2014 and
$70 million during 2013. The intrinsic value of cash-settled RSUs
vested was $24 million during 2015. The accrued liability associated
with cash-settled RSUs and PSUs consisted of a current portion
of $10 million (included in accounts payable and accrued liabilities)
and a long-term portion of $8 million (included in other liabilities)
at December 31, 2015, and a current portion of $17 million and a
long-term portion of $19 million at December 31, 2014.
Other Information. The following table includes amounts
related to exercises of stock options and vesting of RSUs during
the years ended December 31:
2015 2014 2013
FCX shares tendered to pay the
exercise price and/or the
minimum required taxes a 349,122 474,480 3,294,624
Cash received from stock option
exercises $ 3 $ 12 $ 8
Actual tax benefit realized for tax
deductions $ 11 $ 16 $ 8
Amounts FCX paid for employee taxes $ 7 $ 8 $ 105
a. Under terms of the related plans, upon exercise of stock options and vesting of RSUs,
employees may tender FCX shares to pay the exercise price and/or the minimum
required taxes.
NOTE 11. INCOME TAXES
Geographic sources of (losses) income before income taxes and
equity in affiliated companies’ net (losses) earnings for the years
ended December 31 consist of the following:
2015 2014 2013
U.S. $ (14,617) $ ( 2,997) $ 1,104
Foreign 596 2,573 3,809
Total $ (14,021) $ (424) $ 4 ,913
104
With the exception of TFM, income taxes are provided on the
earnings of FCX’s material foreign subsidiaries under the
assumption that these earnings will be distributed. FCX has
determined that TFM’s undistributed earnings are reinvested
indefinitely and have been allocated toward specifically
identifiable needs of the local operations, including, but not
limited to, existing liabilities and sustaining capital requirements.
reevaluate the need to provide income taxes on $1.3 billion of
undistributed earnings in TFM. FCX has not provided deferred
income taxes for other differences between the book and tax
carrying amounts of its investments in material foreign
subsidiaries as FCX considers its ownership positions to be
permanent in duration, and quantification of the related deferred
tax liability is not practicable.
During 2015, PT-FI’s Delaware domestication was terminated.
As a result, PT-FI is no longer a U.S. income tax filer, and tax
attributes related to PT-FI, which were fully reserved with a related
valuation allowance, are no longer available for use in FCX’s
U.S. federal consolidated income tax return. There was no
resulting net impact to FCX’s consolidated statement of operations.
PT-FI remains a limited liability company organized under
Indonesian law.
FCX’s benefit from (provision for) income taxes for the years
ended December 31 consists of the following:
2015 2014 2013
Current income taxes:
Federal $ 89 $ (281) $ (203)
State 2 (35) (9)
Foreign (195) (1,128) (1,081)
Total current (104) (1,444) (1,293)
Deferred income taxes:
Federal 3,403 606 (234)
State 154 214 35
Foreign (144) (33) (346)
Total deferred 3,413 787 (545)
Adjustments (1,374)a — 199b
Federal operating loss carryforwards — 333c 164c
Benefit from (provision for) income taxes $ 1,935 $ (324) $ (1,475)
a. Adjustments include net provisions of $1.2 billion associated with an increase in
the beginning of the year valuation allowance related to the impairment of U.S. oil and
gas properties and $0.2 billion resulting from the termination of PT-FI’s Delaware
domestication reflecting a $1.5 billion reduction in deferred tax assets during the
year, partially offset by a $1.3 billion reduction in the beginning of the year
valuation allowance.
b. As a result of the oil and gas acquisitions, FCX recognized a net benefit of $199 million,
consisting of $190 million associated with net reductions in the beginning of the
year valuation allowances, $69 million related to the release of the deferred tax liability
on PXP’s investment in MMR common stock and $16 million associated with the
revaluation of state deferred tax liabilities, partially offset by income tax expense of
$76 million associated with the write off of deferred tax assets related to
environmental liabilities.
c. Benefit from the use of federal operating loss carryforwards acquired as part of the
oil and gas acquisitions.
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

A reconciliation of the U.S. federal statutory tax rate to FCX’s

effective income tax rate for the years ended December 31 follows:

2015 2014 2013

Amount Percent Amount Percent Amount Percent

U.S. federal statutory tax rate $ 4,907 (35)% $ 149 (35)% $ (1,720) (35)%
Valuation allowance, net (2,964)a 21 — — 190 4
Foreign tax credit limitation (228) 1 (167) 39 (117) (2)
Percentage depletion 186 (1) 263b (62) 223 5
Withholding and other impacts on foreign earnings (193) 1 (161) 38 (306) (7)
Effect of foreign rates different than the U.S. federal statutory rate 56 — 135 (32) 223 5
Goodwill impairment — — (601) 142 — —
Goodwill transferred to full cost pool — — (77) 18 — —
State income taxes 105a (1) 115 (27) 43 —
Other items, net 66 — 20 (5) (11) —
Benefit from (provision for) income taxes $ 1,935 (14)% $ (324)c,d 76% $ (1,475)e (30)%
a. As a result of the impairment to U.S. oil and gas properties, FCX recorded tax charges totaling $3.3 billion to establish valuation allowances against U.S. federal and state deferred tax
assets for which a future benefit is not expected to be realized.
b. Includes a net charge of $16 million in 2014 related to a change in U.S. federal income tax law.
c. Includes charges related to changes in Chilean and Peruvian tax rules of $54 million and $24 million, respectively.
d. Includes a net charge of $221 million related to the sale of the Candelaria and Ojos del Salado mines.
e. Includes a net tax benefit of $199 million as a result of the oil and gas acquisitions.

FCX paid federal, state, local and foreign income taxes totaling
$0.9 billion in 2015, $1.5 billion in 2014 and $1.3 billion in 2013. FCX
received refunds of federal, state, local and foreign income taxes
of $334 million in 2015, $257 million in 2014 and $270 million in 2013.
The components of deferred taxes follow:
December 31, 2015 2014
Deferred tax assets:
Foreign tax credits $ 1,552 $ 2,306
Accrued expenses 1,184 1,047
Oil and gas properties 1,422 —
Minimum tax credits 569 737
Net operating loss carryforwards 621 590
Employee benefit plans 521 422
Other 509 734
Deferred tax assets 6,378 5,836
Valuation allowances (4,183) (2,434)
Net deferred tax assets 2,195 3,402
Deferred tax liabilities:
Property, plant, equipment and mining
development costs (5,567) (5,331)
Oil and gas properties — (3,392)
Undistributed earnings (855) (807)
Other (58) (185)
Total deferred tax liabilities (6,480) (9,715)
Net deferred tax liabilities $ (4,285) $ (6,313)
At December 31, 2015, FCX had U.S. foreign tax credit carryforwards
of $1.6 billion that will expire between 2016 and 2025, and U.S.
minimum tax credit carryforwards of $569 million that can be
carried forward indefinitely, but may be used only to the extent that
regular tax exceeds the alternative minimum tax in any given year.
At December 31, 2015, FCX had (i) U.S. state net operating
loss carryforwards of $3.9 billion that expire between 2016 and
2035, (ii) U.S. federal net operating loss carryforwards of
$740 million that expire between 2030 and 2034, and (iii) Spanish
net operating loss carryforwards of $549 million that can be
carried forward indefinitely.
On the basis of available information at December 31, 2015,
including positive and negative evidence, FCX has provided
valuation allowances for certain of its deferred tax assets where
it believes it is more likely than not that some portion or all
of such assets will not be realized. Valuation allowances totaled
$4.2 billion at December 31, 2015, covering U.S. federal and state
deferred tax assets, including all of FCX’s U.S. foreign tax credit
carryforwards, U.S. minimum tax credit carryforwards, foreign
net operating loss carryforwards, and a portion of FCX’s U.S.
federal and state net operating loss carryforwards. Valuation
allowances totaled $2.4 billion at December 31, 2014, and covered
a portion of FCX’s U.S. foreign tax credit carryforwards, foreign
net operating loss carryforwards, U.S. state net operating loss
carryforwards and U.S. state deferred tax assets.
The valuation allowance related to FCX’s U.S. foreign tax credits
totaled $1.6 billion at December 31, 2015. FCX has operations in
tax jurisdictions where statutory income taxes and withholding
taxes combine to create effective tax rates in excess of the U.S.
federal income tax liability that is due upon repatriation of foreign
earnings. As a result, FCX continues to generate foreign tax
credits for which no benefit is expected to be realized. In addition,
any foreign income taxes currently accrued or paid on unremitted
foreign earnings may result in additional future foreign tax credits
for which no benefit is expected to be realized upon repatriation
of the related earnings. A full valuation allowance will continue to
be carried on these excess U.S. foreign tax credit carryforwards
until such time that FCX believes it has a prudent and feasible means
of securing the benefit of U.S. foreign tax credit carryforwards
that can be implemented.

2015 ANNUAL REPORT 105

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
The valuation allowance related to FCX’s U.S. federal and state
deferred tax assets totaled $1.4 billion at December 31, 2015.
Deferred tax assets represent future deductions for which a benefit
will only be realized to the extent future tax liability is generated
in the same tax period during which the future tax deduction
occurs. FCX develops an estimate of which future tax deductions
will be realized within a tax period generating sufficient tax
liability. A valuation allowance is provided to the extent that
sufficient tax liability does not exist in any given tax period. As of
December 31, 2015, sufficient positive evidence was not available
to support realization of all benefits related to future tax
deductible amounts.
The valuation allowance related to FCX’s U.S. federal minimum
tax credit carryforwards totaled $569 million at December 31, 2015.
U.S. minimum tax credit carryforwards can be carried forward
indefinitely, but can only be used to the extent that U.S. regular tax
liability exceeds U.S. alternative minimum tax liability in any given
year. FCX does not currently expect to generate U.S. regular tax
liability in excess of U.S. alternative minimum tax liability.
The valuation allowance related to FCX’s U.S. federal, state and
foreign net operating loss carryforwards totaled $525 million at
December 31, 2015. The valuation allowance is primarily related to
mining, and oil and gas operations that are not currently expected
to generate taxable income in an amount sufficient to utilize
existing net operating losses prior to their expiration dates.
Valuation allowances will continue to be carried on U.S. federal
and state deferred tax assets, U.S. federal minimum tax credit
carryforwards and U.S. federal, state and foreign net operating
losses until such time that FCX generates taxable income against
which any of the assets or carryforwards can be used, forecasts
of future income provide sufficient positive evidence to support
reversal of the valuation allowances or FCX identifies a prudent
and feasible means of securing the benefit of the assets or
carryforwards that can be implemented.
The $1.7 billion net increase in the valuation allowances during
2015 primarily included a $3.3 billion increase to the valuation
allowances mainly related to impairments of U.S. oil and gas
properties, partially offset by a $1.5 billion decrease in the
valuation allowance against tax credit carryforwards that will no
longer be available for use because of the termination of PT-FI’s
Delaware domestication.
World market prices for commodities have fluctuated
historically. At December 31, 2015, market prices for copper, gold,
molybdenum and oil were below their twelve-month historical
averages. Future market prices at or below 2015 year-end prices
may result in valuation allowances provided on additional
deferred tax assets.
In 2010, the Chilean legislature approved an increase in mining
royalty taxes to help fund earthquake reconstruction activities,
education and health programs. Mining royalty taxes at FCX’s
El Abra mine are 4 percent for the years 2013 through 2017.
Beginning in 2018 and through 2023, rates will move to a sliding
scale of 5 to 14 percent (depending on a defined operational margin).
106
In September 2014, the Chilean legislature approved a tax
reform package that implemented a dual tax system, which was
amended in January 2016. Under previous rules, FCX’s share of
income from Chilean operations was subject to an effective
35 percent tax rate allocated between income taxes and dividend
withholding taxes. Under the amended tax reform package, FCX’s
Chilean operation is subject to the “Partially-Integrated System,”
resulting in FCX’s share of income from El Abra being subject to
progressively increasing effective tax rates of 35 percent through
2019 and 44.5 percent in 2020 and thereafter.
In December 2014, the Peruvian parliament passed tax
legislation intended to stimulate the economy. Under the
legislation, the corporate income tax rate progressively decreases
from 30 percent in 2014 to 26 percent in 2019 and thereafter. In
addition, the dividend tax rate on distributions progressively
increases from 4.1 percent in 2014 to 9.3 percent in 2019 and
thereafter. Cerro Verde’s current mining stability agreement
subjects FCX to a stable income tax rate of 32 percent through the
expiration of the agreement on December 31, 2028. The tax rate
on dividend distributions is not stabilized by the agreement.
FCX accounts for uncertain income tax positions using a
threshold and measurement criteria for the financial statement
recognition and measurement of a tax position taken or expected
to be taken in a tax return. FCX’s policy associated with uncertain
tax positions is to record accrued interest in interest expense
and accrued penalties in other income and expenses rather than
in the provision for income taxes.
A summary of the activities associated with FCX’s reserve for
unrecognized tax benefits for the years ended December 31 follows:
2015 2014 2013
Balance at beginning of year $ 104 $ 110 $ 138
Additions:
Prior year tax positions 7 4 18
Current year tax positions 11 11 14
Acquisition of PXP — — 5
Decreases:
Prior year tax positions (6) (12) (37)
Settlements with taxing authorities — (9) —
Lapse of statute of limitations (6) — (28)
Balance at end of year $ 110 $ 104 $ 110
The total amount of accrued interest associated with unrecognized
tax benefits included in the consolidated balance sheets was
$16 million at December 31, 2015, $15 million at December 31, 2014,
and $21 million at December 31, 2013. There were no penalties
associated with unrecognized tax benefits for the three years
ended December 31, 2015.
The reserve for unrecognized tax benefits of $110 million
at December 31, 2015, included $107 million ($101 million net of
income tax benefits) that, if recognized, would reduce FCX’s
provision for income taxes. Changes to the reserve for
unrecognized tax benefits associated with current and prior year

tax positions were primarily related to uncertainties associated
with FCX’s cost recovery methods and deductibility of social
welfare payments. Additionally, changes in prior year tax
positions were related to uncertainties associated with FCX’s
deductibility of expenses allocated to subsidiaries. Changes to the
reserve for unrecognized tax benefits associated with the lapse
of statute of limitations were primarily related to the deductibility
of worthless stock. There continues to be uncertainty related to
the timing of settlements with taxing authorities, but if additional
settlements are agreed upon during the year 2016, FCX could
experience a change in its reserve for unrecognized tax benefits.
FCX or its subsidiaries file income tax returns in the U.S. federal
jurisdiction and various state and foreign jurisdictions. The tax
years for FCX’s major tax jurisdictions that remain subject to
examination are as follows:
Jurisdiction Years Subject to Examination Additional Open Years
U.S. Federal 2007-2013 2014-2015
Indonesia 2007-2008, ­­2011-2012, 2014 2013, 2015
Peru 2011 2012-2015
Chile 2013-2014 2015
DRC None 2013-2015
NOTE 12. CONTINGENCIES
Environmental. FCX subsidiaries are subject to various national,
state and local environmental laws and regulations that govern
emissions of air pollutants; discharges of water pollutants;
generation, handling, storage and disposal of hazardous
substances, hazardous wastes and other toxic materials; and
remediation, restoration and reclamation of environmental
contamination. FCX subsidiaries that operate in the U.S. also are
subject to potential liabilities arising under CERCLA and similar
state laws that impose responsibility on current and previous
owners and operators of a facility for the remediation of
hazardous substances released from the facility into the
environment, including damages to natural resources, in some
cases irrespective of when the damage to the environment
occurred or who caused it. Remediation liability also extends to
persons who arranged for the disposal of hazardous substances
or transported the hazardous substances to a disposal site
selected by the transporter. These liabilities are often shared on
a joint and several basis, meaning that each responsible party
is fully responsible for the remediation, if some or all of the other
historical owners or operators no longer exist, do not have the
financial ability to respond or cannot be found. As a result,
because of FCX’s acquisition of FMC in 2007, many of the
subsidiary companies FCX now owns are responsible for a wide
variety of environmental remediation projects throughout the
U.S., and FCX expects to spend substantial sums annually for
many years to address those remediation issues. Certain FCX
subsidiaries have been advised by the U.S. Environmental
Protection Agency (EPA), the Department of the Interior, the
Department of Agriculture and various state agencies that, under
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
CERCLA or similar state laws and regulations, they may be liable
for costs of responding to environmental conditions at a number
of sites that have been or are being investigated to determine
whether releases of hazardous substances have occurred and, if
so, to develop and implement remedial actions to address
environmental concerns. FCX is also subject to claims where the
release of hazardous substances is alleged to have damaged
natural resources (NRD) and to litigation by individuals allegedly
exposed to hazardous substances. As of December 31, 2015,
FCX had more than 100 active remediation projects, including
NRD claims, in 26 U.S. states.
A summary of changes in estimated environmental obligations
for the years ended December 31 follows:
2015 2014 2013
Balance at beginning of year $ 1,174 $ 1,167 $ 1,222
Accretion expensea 78 77 79
Additions 33 16 73
Reductionsb (3) (6) (77)
Spending (67) (80) (130)
Balance at end of year 1,215 1,174 1,167
Less current portion (100) (105) (121)
Long-term portion $ 1,115 $ 1,069 $ 1,046
a. Represents accretion of the fair value of environmental obligations assumed in the
2007 acquisition of FMC, which were determined on a discounted cash flow basis.
b. Reductions primarily reflect revisions for changes in the anticipated scope and timing
of projects and other noncash adjustments.
Estimated future environmental cash payments (on an
undiscounted and unescalated basis) total $100 million in 2016,
$127 million in 2017, $104 million in 2018, $92 million in 2019,
$85 million in 2020 and $1.8 billion thereafter. The amount and
timing of these estimated payments will change as a result of
changes in regulatory requirements, changes in scope and timing
of remediation activities, the settlement of environmental matters
and as actual spending occurs.
At December 31, 2015, FCX’s environmental obligations totaled
$1.2 billion, including $1.1 billion recorded on a discounted basis
for those obligations assumed in the FMC acquisition at fair value.
On an undiscounted and unescalated basis, these obligations
totaled $2.3 billion. FCX estimates it is reasonably possible that
these obligations could range between $2.1 billion and $2.7 billion
on an undiscounted and unescalated basis.
At December 31, 2015, the most significant environmental
obligations were associated with the Pinal Creek site in Arizona;
the Newtown Creek site in New York City; historical smelter sites
principally located in Arizona, Kansas, New Jersey, Oklahoma
and Pennsylvania; and uranium mining sites in the western U.S.
The recorded environmental obligations for these sites totaled
$1.0 billion at December 31, 2015. FCX may also be subject
to litigation brought by private parties, regulators and local
governmental authorities related to these historical sites. A
discussion of these sites follows.
2015 ANNUAL REPORT 107
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Pinal Creek. The Pinal Creek site was listed under the Arizona
Department of Environmental Quality’s (ADEQ) Water Quality
Assurance Revolving Fund program in 1989 for contamination in
the shallow alluvial aquifers within the Pinal Creek drainage near
Miami, Arizona. Since that time, environmental remediation was
performed by members of the Pinal Creek Group (PCG),
consisting of FMC Miami, Inc. (Miami), a wholly owned subsidiary
of FCX, and two other companies. Pursuant to a 2010 settlement
agreement, Miami agreed to take full responsibility for future
groundwater remediation at the Pinal Creek site, with limited
exceptions. Remediation work consisting of both capping
(earthwork) and groundwater extraction and treatment continues
and is expected to continue for many years in the future.
Newtown Creek. From the 1930s until 1964, Phelps Dodge
Refining Corporation (PDRC), a subsidiary of FCX, operated a
copper smelter and, from the 1930s until 1984, operated a copper
refinery on the banks of Newtown Creek (the creek), which is a
3.5-mile-long waterway that forms part of the boundary between
Brooklyn and Queens in New York City. Heavy industrialization
along the banks of the creek and discharges from the City of
New York’s sewer system over more than a century resulted in
significant environmental contamination of the waterway. In 2010,
EPA notified PDRC, four other companies and the City of New York
that EPA considers them to be PRPs under CERCLA. The notified
parties began working with EPA to identify other PRPs, and EPA
proposed that the notified parties perform a remedial investigation/
feasibility study (RI/FS) at their expense and reimburse EPA for its
oversight costs. EPA is not expected to propose a remedy until
after the RI/FS is completed. Additionally, in 2010, EPA designated
the creek as a Superfund site, and in 2011, PDRC and five other
parties entered an Administrative Order on Consent (AOC) to
perform the RI/FS to assess the nature and extent of environmental
contamination in the creek and identify potential remedial
options. The parties’ RI/FS work under the AOC and their efforts
to identify other PRPs are ongoing; the RI is expected to be
completed in late 2016, with the FS approved by EPA in 2019, and
remedial action could possibly begin in 2022. The actual costs of
fulfilling this remedial obligation and the allocation of costs
among PRPs are uncertain and subject to change based on the
results of the RI/FS, the remediation remedy ultimately selected
by EPA and related allocation determinations. The overall cost
and the portion ultimately allocated to PDRC could be material to
FCX and significantly exceed the amount currently reserved for
this contingency.
Historical Smelter Sites. FCX subsidiaries and their predecessors
at various times owned or operated copper, zinc and lead
smelters in states including Arizona, Kansas, Missouri, New Jersey,
Oklahoma and Pennsylvania. For some of these smelter sites,
certain FCX subsidiaries have been advised by EPA or state
agencies that they may be liable for costs of investigating and, if
appropriate, remediating environmental conditions associated with
the smelters. At other sites, certain FCX subsidiaries have entered
into state voluntary remediation programs to investigate and,
108
if appropriate, remediate onsite and offsite conditions associated
with the smelters. The historical smelter sites are in various stages
of assessment and remediation. At some of these sites, disputes
with local residents and elected officials regarding alleged health
effects or the effectiveness of remediation efforts have resulted
in litigation of various types, and similar litigation at other sites
is possible.
Uranium Mining Sites. During a period between 1940 and the
early 1970s, certain FCX subsidiaries and their predecessors were
involved in uranium exploration and mining in the western U.S.,
primarily on federal and tribal lands in the Four Corners region of
the southwest. Similar exploration and mining activities by other
companies have also caused environmental impacts warranting
remediation, and EPA and local authorities are currently
evaluating the need for significant cleanup activities in the region.
To date, FCX has undertaken remediation work at a limited
number of sites associated with these predecessor entities. During
2014, FCX initiated reconnaissance work at a limited number
of historic mining sites on federal lands, which continued in 2015;
approximately 20 percent of FCX’s known federal sites have been
initially evaluated. FCX expects to increase those activities over
the next several years in order to identify sites for possible future
investigation and remediation. During 2014, FCX also initiated
discussions with federal and tribal representatives regarding a
potential phased program to investigate and remediate historic
uranium sites on tribal lands in the Four Corners region. Those
discussions continued in 2015, when FCX also initiated
discussions with the Department of Justice regarding the possible
federal government’s share of the liability on tribal lands.
AROs. FCX’s ARO estimates are reflected on a third-party cost
basis and are based on FCX’s legal obligation to retire tangible,
long-lived assets. A summary of changes in FCX’s AROs for the
years ended December 31 follows:
2015 2014 2013
Balance at beginning of year $ 2,769 $ 2,328 $ 1,146
Liabilities assumed in the
acquisitions of PXP and MMRa — — 1,028
Liabilities incurred 98 430b 45
Settlements and revisions to
cash flow estimates, net (66) 65 123
Accretion expense 131 117 95
Dispositions — (61) —
Spending (133) (99) (107)
Other (3) (11) (2)
Balance at end of year 2,796 2,769 2,328
Less current portion (172) (191) (115)
Long-term portion $ 2,624 $ 2,578 $ 2,213
a. The fair value of AROs assumed in the acquisitions of PXP and MMR ($741 million and
$287 million, respectively) were estimated based on projected cash flows, an
estimated long-term annual inflation rate of 2.5 percent and discount rates based on
FCX’s estimated credit-adjusted, risk-free interest rates ranging from 1.3 percent to
6.3 percent.
b. Primarily reflects updates to the closure approach to reclaim an overburden stockpile
in Indonesia.

ARO costs may increase or decrease significantly in the future as a
result of changes in regulations, changes in engineering designs
and technology, permit modifications or updates, changes in mine
plans, changes in drilling plans, settlements, inflation or other
factors and as reclamation spending occurs. ARO activities and
expenditures for mining operations generally are made over an
extended period of time commencing near the end of the mine life;
however, certain reclamation activities may be accelerated if legally
required or if determined to be economically beneficial. The
methods used or required to plug and abandon non-producing oil
and gas wellbores; remove platforms, tanks, production equipment
and flow lines; and restore wellsites could change over time.
New Mexico, Arizona, Colorado and other states require financial
assurance to be provided for the estimated costs of mine
reclamation and closure, including groundwater quality protection
programs. FCX has satisfied financial assurance requirements by
using a variety of mechanisms, primarily involving parent company
performance guarantees and financial capability demonstrations,
but also including trust funds, surety bonds, letters of credit and
other collateral. The applicable regulations specify financial
strength tests that are designed to confirm a company’s or
guarantor’s financial capability to fund estimated reclamation and
closure costs. The amount of financial assurance FCX is required to
provide will vary with changes in laws, regulations, reclamation
and closure requirements, and cost estimates. At December 31,
2015, FCX’s financial assurance obligations associated with these
closure and reclamation/restoration costs totaled $994 million, of
which $617 million was in the form of guarantees issued by FCX
and financial capability demonstrations of FCX. At December 31,
2015, FCX had trust assets totaling $169 million (included in other
assets), which are legally restricted to be used to satisfy its
financial assurance obligations for its mining properties in New
Mexico. In addition, FCX has financial assurance obligations for its
oil and gas properties associated with plugging and abandoning
wells and facilities totaling $1.5 billion. Where oil and gas guarantees
associated with the Bureau of Ocean Energy Management do not
include a stated cap, the amounts reflect management’s estimates
of the potential exposure.
New Mexico Environmental and Reclamation Programs. FCX’s
New Mexico operations are regulated under the New Mexico
Water Quality Act and regulations adopted by the Water Quality
Control Commission (WQCC). In connection with discharge
permits, the New Mexico Environment Department (NMED) has
required each of these operations to submit closure plans for
NMED’s approval. The closure plans must include measures to
assure meeting applicable groundwater quality standards
following the closure of discharging facilities and to abate
groundwater or surface water contamination to meet applicable
standards. In 2013, the WQCC adopted Supplemental Permitting
Requirements for Copper Mining Facilities, which became
effective on December 1, 2013, and specify closure requirements
for copper mine facilities. The rules were adopted after an
extensive stakeholder process in which FCX participated and were
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
jointly supported by FCX and NMED. The rules are currently
being challenged in the New Mexico Supreme Court by certain
environmental organizations and the New Mexico Attorney
General. Finalized closure plan requirements, including those
resulting from application of the 2013 rules or the application of
different standards if the rules are invalidated by the New Mexico
Supreme Court, could result in material increases in closure
costs for FCX’s New Mexico operations.
FCX’s New Mexico operations also are subject to regulation
under the 1993 New Mexico Mining Act (the Mining Act) and the
related rules that are administered by the Mining and Minerals
Division (MMD) of the New Mexico Energy, Minerals and
Natural Resources Department. Under the Mining Act, mines are
required to obtain approval of plans describing the reclamation
to be performed following cessation of mining operations.
At December 31, 2015, FCX had accrued reclamation and closure
costs of $451 million for its New Mexico operations. As stated
above, additional accruals may be required based on the
state’s periodic review of FCX’s updated closure plans and any
resulting permit conditions, and the amount of those accruals
could be material.
Arizona Environmental and Reclamation Programs. FCX’s
Arizona properties are subject to regulatory oversight in several
areas. ADEQ has adopted regulations for its aquifer protection
permit (APP) program that require permits for, among other
things, certain facilities, activities and structures used for mining,
leaching, concentrating and smelting, and require compliance
with aquifer water quality standards at an applicable point of
compliance well or location during both operations and closure.
The APP program also may require mitigation and discharge
reduction or elimination of some discharges.
An application for an APP requires a proposed closure strategy
that will meet applicable groundwater protection requirements
following cessation of operations and an estimate of the cost
to implement the closure strategy. An APP may specify closure
requirements, which may include post-closure monitoring and
maintenance. A more detailed closure plan must be submitted
within 90 days after a permitted entity notifies ADEQ of its intent
to cease operations. A permit applicant must demonstrate its
financial ability to meet the closure costs approved by ADEQ. In
2014, the state enacted legislation requiring closure costs for
facilities covered by aquifer protection permits to be updated no
more frequently than every five years and financial assurance
mechanisms to be updated no more frequently than every two
years. While some closure cost updates will occur in the normal
course as modifications to aquifer protection permits, ADEQ
has not yet formally notified FCX regarding the timetable for
updating other closure cost estimates and financial assurance
mechanisms for FCX’s Arizona mine sites. In 2015, amendments to
aquifer protection permits were submitted to ADEQ for Safford
and Sierrita, which will result in increased closure costs. FCX may
be required to begin updating its closure cost estimates at other
Arizona sites in 2016.
2015 ANNUAL REPORT 109
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Portions of Arizona mining facilities that operated after January 1,
1986, also are subject to the Arizona Mined Land Reclamation Act
(AMLRA). AMLRA requires reclamation to achieve stability and
safety consistent with post-mining land use objectives specified
in a reclamation plan. Reclamation plans must be approved by the
State Mine Inspector and must include an estimate of the cost to
perform the reclamation measures specified in the plan along
with financial assurance. FCX will continue to evaluate options for
future reclamation and closure activities at its operating and
non-operating sites, which are likely to result in adjustments to
FCX’s ARO liabilities, and those adjustments could be material. At
December 31, 2015, FCX had accrued reclamation and closure
costs of $298 million for its Arizona operations.
Colorado Reclamation Programs. FCX’s Colorado operations
are regulated by the Colorado Mined Land Reclamation Act
(Reclamation Act) and regulations promulgated thereunder.
Under the Reclamation Act, mines are required to obtain approval
of plans for reclamation of lands affected by mining operations to
be performed during mining or upon cessation of mining
operations. During 2015, the Colorado Division of Reclamation
Mining & Safety (DRMS) approved an increase in Henderson’s
closure costs, principally to address long-term water management.
As of December 31, 2015, FCX had accrued reclamation and
closure costs of $66 million for its Colorado operations.
Chilean Reclamation and Closure Programs. In July 2011, the
Chilean senate passed legislation regulating mine closure, which
establishes new requirements for closure plans and became
effective in November 2012. FCX’s El Abra operation submitted
updated closure cost estimates based on the existing approved
closure plan in November 2014. At December 31, 2015, FCX
had accrued reclamation and closure costs of $51 million for its
El Abra operation.
Peruvian Reclamation and Closure Programs. Cerro Verde is
subject to regulation under the Mine Closure Law administered by
the Peruvian Ministry of Energy and Mines. Under the closure
regulations, mines must submit a closure plan that includes the
reclamation methods, closure cost estimates, methods of control
and verification, closure and post-closure plans, and financial
assurance. The latest closure plan and cost estimate for the Cerro
Verde mine expansion were submitted to the Peruvian regulatory
authorities in November 2013. At December 31, 2015, Cerro Verde
had accrued reclamation and closure costs of $106 million.
Indonesian Reclamation and Closure Programs. The ultimate
amount of reclamation and closure costs to be incurred at
PT-FI’s operations will be determined based on applicable laws
and regulations and PT-FI’s assessment of appropriate remedial
activities in the circumstances, after consultation with
governmental authorities, affected local residents and other
affected parties and cannot currently be projected with precision.
Some reclamation costs will be incurred during mining activities,
while the remaining reclamation costs will be incurred at the end
110
of mining activities, which are currently estimated to continue
for approximately 25 years. During 2014, PT-FI updated its
closure approach for an overburden stockpile, which resulted in
an increase in the estimated closure costs of $403 million. At
December 31, 2015, PT-FI had accrued reclamation and closure
costs of $674 million.
In 1996, PT-FI began contributing to a cash fund ($21 million
balance at December 31, 2015, which is included in other assets)
designed to accumulate at least $100 million (including interest)
by the end of its Indonesia mining activities. PT-FI plans to
use this fund, including accrued interest, to pay mine closure and
reclamation costs or satisfy a portion of Indonesian financial
requirements under recently issued regulations. Any costs in
excess of the $100 million fund would be funded by operational
cash flow or other sources.
In December 2009, PT-FI submitted its revised mine closure
plan to the Department of Energy and Mineral Resources for review
and addressed comments received during the course of this
review process. In December 2010, the Indonesian government
issued a regulation regarding mine reclamation and closure,
which requires a company to provide a mine closure guarantee in
the form of a time deposit placed in a state-owned bank in
Indonesia. In accordance with its COW, PT-FI is working with the
Department of Energy and Mineral Resources to review these
requirements, including discussion of other options for the mine
closure guarantee.
Oil and Gas Properties. Substantially all of FM O&G’s oil and
gas leases require that, upon termination of economic production,
the working interest owners plug and abandon non-producing
wellbores, remove equipment and facilities from leased acreage,
and restore land in accordance with applicable local, state and
federal laws. FM O&G operating areas include the GOM, offshore
and onshore California, the Gulf Coast and the Rocky Mountain
area. FM O&G AROs cover more than 6,400 wells and more than
180 platforms and other structures. During 2015, liabilities
incurred for FM O&G totaled $79 million for new wells primarily in
the GOM area. At December 31, 2015, FM O&G had accrued
$1.1 billion associated with its AROs.
Litigation. FCX is involved in numerous legal proceedings that
arise in the ordinary course of business or are associated with
environmental issues arising from legacy operations conducted
over the years by FMC and its affiliates as discussed in this note
under “Environmental.” FCX is also involved periodically in other
reviews, investigations and proceedings by government agencies,
some of which may result in adverse judgments, settlements,
fines, penalties, injunctions or other relief. Management does not
believe, based on currently available information, that the
outcome of any legal proceeding reported below will have a
material adverse effect on FCX’s financial condition, although
individual outcomes could be material to FCX’s operating results
for a particular period, depending on the nature and magnitude
of the outcome and the operating results for the period.

Asbestos Claims. Since approximately 1990, FMC and various
subsidiaries have been named as defendants in a large number of
lawsuits that claim personal injury either from exposure to
asbestos allegedly contained in electrical wire products produced
or marketed many years ago or from asbestos contained in
buildings and facilities located at properties owned or operated
by FMC affiliates, or from alleged asbestos in talc products. Many
of these suits involve a large number of codefendants. Based on
litigation results to date and facts currently known, FCX believes
there is a reasonable possibility that losses may have been
incurred related to these matters; however, FCX also believes that
the amounts of any such losses, individually or in the aggregate,
are not material to its consolidated financial statements. There
can be no assurance, however, that future developments will not
alter this conclusion.
Shareholder Litigation. On January 15, 2015, a Stipulation and
Agreement of Settlement, Compromise and Release (Stipulation)
was entered into with respect to the consolidated stockholder
derivative litigation captioned In Re Freeport-McMoRan Copper &
Gold Inc. Derivative Litigation, No. 8145-VCN. This settlement
resolved all derivative claims against directors and officers of FCX
challenging FCX’s 2013 acquisitions of PXP and MMR. During
2015, insurers under FCX’s directors and officers liability
insurance policies and other third parties funded the $125 million
settlement amount that, net of plaintiffs’ legal fees and expenses,
resulted in the recognition of a gain of $92 million (included in
other income (expense)). In accordance with the approved
settlement terms, FCX’s Board declared a special dividend that
was paid on August 3, 2015.
Pursuant to the settlement, FCX’s Board also approved and
agreed to keep in effect for at least three years corporate
governance enhancements specified in the Stipulation. These
corporate governance enhancements include agreements by FCX
to maintain and/or establish (i) a lead independent director position,
(ii) an independent executive committee, (iii) solely independent
directors on each of the executive, corporate responsibility, audit,
compensation, and nominating and governance committees,
and (iv) certain procedures or policies relating to the selection of
members of special committees, approval of related-party
transactions and executive compensation.
Tax and Other Matters. FCX’s operations are in multiple
jurisdictions where uncertainties arise in the application of
complex tax regulations. Some of these tax regimes are defined
by contractual agreements with the local government, while
others are defined by general tax laws and regulations. FCX and
its subsidiaries are subject to reviews of its income tax filings and
other tax payments, and disputes can arise with the taxing
authorities over the interpretation of its contracts or laws. The
final taxes paid may be dependent upon many factors, including
negotiations with taxing authorities. In certain jurisdictions, FCX
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
must pay a portion of the disputed amount to the local government
in order to formally appeal the assessment. Such payment is
recorded as a receivable if FCX believes the amount is collectible.
Cerro Verde Royalty Dispute. SUNAT, the Peruvian national tax
authority, has assessed mining royalties on ore processed by
the Cerro Verde concentrator, which commenced operations in
late 2006. These assessments cover the period December 2006
to December 2007 and the years 2008 and 2009.
In July 2013, the Peruvian Tax Tribunal issued two decisions
affirming SUNAT’s assessments for the period December 2006
through December 2008. In September 2013, Cerro Verde filed
judiciary appeals related to the assessments because it believes
that its 1998 stability agreement exempts from royalties all
minerals extracted from its mining concession, irrespective of the
method used for processing those minerals. With respect to the
judiciary appeal related to assessments for the year 2008, on
December 17, 2014, Peru’s Eighteenth Contentious Administrative
Court, which specializes in taxation matters, rendered its decision
upholding Cerro Verde’s position and declaring the Tax Tribunal’s
resolution invalid. On December 31, 2014, SUNAT and the Tax
Tribunal appealed this decision. On January 29, 2016, Peru’s Sixth
Contentious Administrative Chamber of the Appellate Court
nullified the decision of the Eighteenth Contentious Administrative
Court. Cerro Verde will appeal the decision to the Peruvian
Supreme Court. Although FCX believes Cerro Verde’s interpretation
of the stability agreement is correct, if Cerro Verde is ultimately
found responsible for these assessments, it may also be liable for
penalties and interest, which accrue at rates that range from
approximately 7 percent to 18 percent based on the year accrued
and the currency in which the amounts would be payable.
In October 2013, SUNAT served Cerro Verde with a demand
for payment based on the Peruvian Tax Tribunal’s decisions for the
period December 2006 through December 2008. The aggregate
amount of these assessments totals $179 million (based on
the exchange rate as of December 31, 2015), including estimated
accumulated interest and penalties. As permitted by law, Cerro
Verde requested and was granted an installment payment program
that deferred payment for six months and thereafter required
66 equal monthly payments. Through December 31, 2015, Cerro
Verde has made payments totaling $64 million (based on exchange
rates as of the dates of payment) under the installment program,
which are included in other assets in the consolidated balance sheet.
In July 2013, a hearing on SUNAT’s assessment for 2009 was held,
but no decision has been issued by the Tax Tribunal for that year.
The aggregate amount of the assessment for 2009 totals
$72 million (based on the exchange rate as of December 31, 2015),
including estimated accumulated interest and penalties.
SUNAT may make additional assessments for mining royalties
and associated penalties and interest for the years 2010 through
2013, which Cerro Verde will contest. FCX estimates the total
2015 ANNUAL REPORT 111
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FINANCIAL STATEMENTS
exposure associated with the assessments for mining royalties
discussed above for the period from December 2006 through
December 2009, and for the years 2010 through 2013 approximates
$500 million (based on the exchange rate as of December 31, 2015),
including estimated accumulated interest and penalties. No amounts
have been accrued for these assessments or the installment
payment program as of December 31, 2015, because Cerro Verde
believes its 1998 stability agreement exempts it from these
royalties and believes any payments will be recoverable.
Other Peruvian Tax Matters. Cerro Verde has also received
assessments from SUNAT for additional taxes, penalties and
interest related to various audit exceptions for income and other
taxes. Cerro Verde has filed or will file objections to the
assessments because it believes it has properly determined and
paid its taxes. A summary of these assessments follows:
Penalty and assessments, which it believes are collectible. In addition, PT-FI
Tax Interest has $285 million (included in income and other tax receivables)
Tax Year Assessment Assessment Total
2002 to 2005 $ 16 $ 53 $ 69
2006 7 47 54
2007 12 18 30
2008 21 13 34
2009 56 48 104
2010 66 89 155
2014 5 — 5
2015 4 — 4
$
187 $
2 68 $ 455
As of December 31, 2015, Cerro Verde had paid $181 million
(included in other assets) on these disputed tax assessments, which
it believes is collectible. No amounts have been accrued for
these assessments.
Indonesia Tax Matters. PT-FI has received assessments from
the Indonesian tax authorities for additional taxes and interest
related to various audit exceptions for income and other taxes.
PT-FI has filed objections to the assessments because it believes it
has properly determined and paid its taxes. A summary of these
assessments follows:
Tax Interest
Tax Year Assessment Assessment Total
2005 $ 103 $ 49 $ 152
2006 22 10 32
2007 91 44 135
2008 62 52 114
2011 56 13 69
2012 137 — 137
$ 471 $ 168 $ 639
Required estimated income tax payments for 2011 significantly
exceeded PT-FI’s 2011 reported income tax liability, which resulted
in a $313 million overpayment. During 2013, the Indonesian tax
authorities agreed to refund $291 million associated with income
tax overpayments made by PT-FI for 2011, and PT-FI filed
objections for the remaining $22 million that it believes it is due.
112
PT-FI received a cash refund of $165 million in July 2013, and the
Indonesian tax authorities withheld $126 million of the 2011
overpayment for unrelated assessments from 2005 and 2007,
which PT-FI is disputing.
Required estimated income tax payments for 2012 significantly
exceeded PT-FI’s 2012 reported income tax liability, which resulted
in a $303 million overpayment. During second-quarter 2014,
the Indonesian tax authorities issued tax assessments for 2012 of
$137 million and other offsets of $15 million, and refunded the
balance of $151 million (before foreign exchange adjustments).
PT-FI filed objections and will use other means available under
Indonesian tax laws and regulations to recover all overpayments
that remain in dispute.
As of December 31, 2015, PT-FI had paid $259 million (of which
$209 million was included in other assets) on disputed tax
for overpayments of 2014 income taxes and $106 million (included
in other assets) for overpayments of 2015 income taxes.
In December 2009, PT-FI was notified by Indonesian tax
authorities that PT-FI was obligated to pay value added taxes
on certain goods imported after the year 2000. In December 2014,
PT-FI paid $269 million for value added taxes for the period
from November 2005 through 2009 and sought a refund. In
January 2016, PT-FI received audit findings confirming the refund
amount, which, based on the exchange rate as of December 31,
2015, is expected to be $215 million (included in income and
other tax receivables in the consolidated balance sheet at
December 31, 2015).
PT-FI received assessments from the local regional tax
authority in Papua, Indonesia, for additional taxes and penalties
related to surface water taxes for the period from January 2011
through December 2015. PT-FI has filed or will file objections to
these assessments. The local government of Papua rejected
PT-FI’s objections to the assessments related to the period from
January 2011 through July 2015, and PT-FI filed appeals with the
Indonesian tax court for these periods. The aggregate amount of
all assessments received through February 19, 2016, including
penalties, was 2.7 trillion Indonesian rupiah ($197 million based
on the exchange rate as of December 31, 2015). Additional
penalties, which could be significant, may be assessed depending
on the outcome of the appeals process. No amounts have been
accrued for these assessments as of December 31, 2015, because
PT-FI believes its COW exempts it from these payments and
that it has the right to contest these assessments in the tax court
and ultimately the Indonesian Supreme Court.
Letters of Credit, Bank Guarantees and Surety Bonds. Letters of
credit and bank guarantees totaled $300 million at December 31,
2015, primarily for the Cerro Verde royalty dispute (refer to
discussion above), environmental and asset retirement obligations,
workers’ compensation insurance programs, tax and customs
obligations, and other commercial obligations. In addition, FCX
had surety bonds totaling $276 million at December 31, 2015,

associated with environmental and asset retirement obligations
($217 million), self-insurance bonds primarily for workers’
compensation ($21 million) and other bonds ($38 million).
Insurance. FCX purchases a variety of insurance products to
mitigate potential losses, which typically have specified
deductible amounts or self-insured retentions and policy limits.
FCX generally is self-insured for U.S. workers’ compensation, but
purchases excess insurance up to statutory limits. An actuarial
analysis is performed twice a year on the various casualty
insurance programs covering FCX’s U.S.-based mining operations,
including workers’ compensation, to estimate expected losses.
At December 31, 2015, expected losses under these insurance
programs totaled $66 million, which consisted of a current portion
of $7 million (included in accounts payable and accrued liabilities)
and a long-term portion of $59 million (included in other
liabilities).
FCX’s oil and gas operations are subject to all of the risks
normally incident to the exploration for and the production of
oil and gas, including well blowouts, cratering, explosions, oil
spills, releases of gas or well fluids, fires, pollution and releases of
toxic gas, each of which could result in damage to or destruction
of oil and gas wells, production facilities or other property or
injury to persons. Although FCX maintains insurance coverage
considered to be customary in the oil and gas industry, FCX
is not fully insured against all risks either because insurance is not
available or because of high premium costs. FCX is self-insured
for named windstorms in the GOM. FCX’s insurance policies
provide limited coverage for losses or liabilities relating to pollution,
with broader coverage for sudden and accidental occurrences.
NOTE 13. COMMITMENTS AND GUARANTEES
Operating Leases. FCX leases various types of properties, including
offices, aircraft and equipment. Future minimum rentals under
non-cancelable leases at December 31, 2015, total $54 million in
2016, $49 million in 2017, $40 million in 2018, $25 million in 2019,
$23 million in 2020 and $146 million thereafter. Minimum payments
under operating leases have not been reduced by aggregate
minimum sublease rentals, which are minimal. Total aggregate
rental expense under operating leases was $89 million in 2015
and $96 million in both 2014 and 2013.
Contractual Obligations. Based on applicable prices at
December 31, 2015, FCX has unconditional purchase obligations
of $3.9 billion, primarily comprising minimum commitments for
deepwater drillships ($1.2 billion), the procurement of copper
concentrate ($854 million), transportation services ($671 million)
and electricity ($601 million). Some of FCX’s unconditional
purchase obligations are settled based on the prevailing market
rate for the service or commodity purchased. In some cases,
the amount of the actual obligation may change over time
because of market conditions. Drillship obligations provide for
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
an operating rate over the contractual term. Transportation
obligations are primarily for South America contracted ocean
freight and FM O&G contracted rates for natural gas and crude oil
gathering systems. Obligations for copper concentrate provide
for deliveries of specified volumes to Atlantic Copper at market-
based prices. Electricity obligations are primarily for contractual
minimum demand at the South America mines.
FCX’s future commitments associated with unconditional
purchase obligations total $2.2 billion in 2016, $0.9 billion in 2017,
$184 million in 2018, $93 million in 2019, $73 million in 2020
and $482 million thereafter. During the three-year period ended
December 31, 2015, FCX fulfilled its minimum contractual
purchase obligations.
Mining Contracts — Indonesia. FCX is entitled to mine in
Indonesia under the COW between PT-FI and the Indonesian
government. The original COW was entered into in 1967 and was
replaced with the current COW in 1991. The initial term of the
current COW expires in 2021 but can be extended by PT-FI for two
10-year periods subject to Indonesian government approval, which
pursuant to the COW cannot be withheld or delayed unreasonably.
The copper royalty rate payable by PT-FI under its COW,
prior to modifications discussed below as a result of the July 2014
Memorandum of Understanding (MOU), varied from 1.5 percent
of copper net revenue at a copper price of $0.90 or less per
pound to 3.5 percent at a copper price of $1.10 or more per pound.
The COW royalty rate for gold and silver sales was at a fixed rate
of 1.0 percent.
A large part of the mineral royalties under Indonesian government
regulations is designated to the provinces from which the
minerals are extracted. In connection with its fourth concentrator
mill expansion completed in 1998, PT-FI agreed to pay the
Indonesian government additional royalties (royalties not required
by the COW) to provide further support to the local governments
and to the people of the Indonesian province of Papua. The
additional royalties were paid on production exceeding specified
annual amounts of copper, gold and silver generated when
PT-FI’s milling facilities operated above 200,000 metric tons of
ore per day. The additional royalty for copper equaled the
COW royalty rate, and for gold and silver equaled twice the COW
royalty rates. Therefore, PT-FI’s royalty rate on copper net
revenues from production above the agreed levels was double
the COW royalty rate, and the royalty rates on gold and silver
sales from production above the agreed levels were triple the
COW royalty rates.
In January 2014, the Indonesian government published
regulations that among other things imposed a progressive export
duty on copper concentrate and restricts concentrate exports
after January 12, 2017. PT-FI’s COW authorizes it to export
concentrate and specifies the taxes and other fiscal terms available
to its operations. The COW states that PT-FI shall not be subject to
taxes, duties or fees subsequently imposed or approved by the
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FINANCIAL STATEMENTS
Indonesian government except as expressly provided in the COW.
Additionally, PT-FI complied with the requirements of its COW for
local processing by arranging for the construction and
commissioning of Indonesia’s only copper smelter and refinery,
which is owned by PT Smelting (refer to Note 6). In July 2014, PT-FI
entered into a MOU with the Indonesian government. Execution
of the MOU enabled the resumption of concentrate exports
in August 2014, which had been suspended since January 2014.
Under the MOU, PT-FI provided a $115 million assurance bond
to support its commitment for smelter development, agreed to
increase royalty rates to 4.0 percent for copper and 3.75 percent
for gold from the previous rates of 3.5 percent for copper and
1.0 percent for gold, and agreed to pay export duties as set forth
in a new regulation. The Indonesian government revised its
January 2014 regulations regarding export duties, which were
set at 7.5 percent, declining to 5.0 percent when smelter
development progress exceeds 7.5 percent and are eliminated
when development progress exceeds 30 percent. The MOU also
anticipated an amendment of the COW within six months to
address other matters; however, no terms of the COW other than
those relating to the smelter bond, increased royalties and export
duties were changed. In January 2015, the MOU was extended to
July 25, 2015, and it expired on that date. The increased royalty
rates, export duties and smelter assurance bond remain in effect.
PT-FI’s royalties totaled $114 million in 2015, $115 million in 2014
and $109 million in 2013, and export duties totaled $109 million in
2015 and $77 million in 2014.
PT-FI is required to apply for renewal of export permits at
six-month intervals. On July 29, 2015, PT-FI’s export permit was
renewed through January 28, 2016. In connection with the
renewal, export duties were reduced to 5.0 percent as a result of
smelter development progress. On February 9, 2016, PT-FI’s
export permit was renewed through August 8, 2016. PT-FI will
continue to pay a five percent export duty on concentrate while it
reviews its smelter progress with the Indonesian government.
PT-FI continues to engage in discussion with the Indonesian
government regarding its COW and long-term operating rights. In
October 2015, the Indonesian government provided a letter of
assurance to PT-FI indicating that it will approve the extension of
operations beyond 2021, and provide the same rights and the
same level of legal and fiscal certainty provided under its current
COW although that approval has not yet been received.
In connection with its COW negotiations and subject to
concluding the agreement to extend PT-FI’s operations beyond
2021 on acceptable terms, PT-FI has agreed to construct
new smelter capacity in Indonesia and to divest an additional
20.64 percent interest in PT-FI at fair market value. PT-FI continues
to advance plans for the smelter in parallel with completing its
COW negotiations.
114
Mining Contracts — Africa. FCX is entitled to mine in the
DRC under an Amended and Restated Mining Convention (ARMC)
between TFM and the Government of the DRC. The original
Mining Convention entered into in 1996 was replaced with the
ARMC in 2005 and was further amended in 2010 (approved in
2011). The current ARMC will remain in effect for as long as the
Tenke concessions are exploitable. The royalty rate payable by
TFM under the ARMC is two percent of net revenue. These mining
royalties totaled $25 million in 2015 and $29 million in both 2014
and 2013.
Community Development Programs. FCX has adopted policies
that govern its working relationships with the communities where
it operates. These policies are designed to guide its practices
and programs in a manner that respects basic human rights and
the culture of the local people impacted by FCX’s operations.
FCX continues to make significant expenditures on community
development, education, training and cultural programs.
In 1996, PT-FI established the Freeport Partnership Fund for
Community Development (Partnership Fund) through which
PT-FI has made available funding and technical assistance to
support community development initiatives in the area of health,
education and economic development of the area. PT-FI has
committed through 2016 to provide one percent of its annual
revenue for the development of the local people in its area of
operations through the Partnership Fund. PT-FI charged $27 million
in 2015, $31 million in 2014 and $41 million in 2013 to cost of
sales for this commitment.
TFM has committed to assist the communities living within its
concession areas in the Southeast region of the DRC. TFM will
contribute 0.3 percent of net sales revenue from production to
a community development fund to assist the local communities
with development of local infrastructure and related services,
including health, education and agriculture. TFM charged
$4 million in each of the years 2015, 2014 and 2013 to cost of sales
for this commitment.
Guarantees. FCX provides certain financial guarantees (including
indirect guarantees of the indebtedness of others) and indemnities.
At December 31, 2015, FCX’s venture agreement with
Sumitomo at its Morenci mine in Arizona (refer to Note 3 for
further discussion) includes a put and call option guarantee
clause. FCX holds an 85 percent undivided interest in the Morenci
complex. Under certain conditions defined in the venture
agreement, Sumitomo has the right to sell its 15 percent share to
FCX. Likewise, under certain conditions, FCX has the right to
purchase Sumitomo’s share of the venture. At December 31, 2015,
the maximum potential payment FCX is obligated to make to
Sumitomo upon exercise of the put option (or FCX’s exercise of its
call option) totaled approximately $347 million based on
calculations defined in the venture agreement. At December 31,
2015, FCX had not recorded any liability in its consolidated
financial statements in connection with this guarantee as FCX
does not believe, based on information available, that it is

probable that any amounts will be paid under this guarantee as
the fair value of Sumitomo’s 15 percent share is in excess of the
exercise price.
Prior to its acquisition by FCX, FMC and its subsidiaries have,
as part of merger, acquisition, divestiture and other transactions,
from time to time, indemnified certain sellers, buyers or other
parties related to the transaction from and against certain
liabilities associated with conditions in existence (or claims
associated with actions taken) prior to the closing date of the
transaction. As part of these transactions, FMC indemnified the
counterparty from and against certain excluded or retained
liabilities existing at the time of sale that would otherwise have
been transferred to the party at closing. These indemnity
provisions generally now require FCX to indemnify the party
against certain liabilities that may arise in the future from the
pre-closing activities of FMC for assets sold or purchased. The
indemnity classifications include environmental, tax and certain
operating liabilities, claims or litigation existing at closing and
various excluded liabilities or obligations. Most of these
indemnity obligations arise from transactions that closed many
years ago, and given the nature of these indemnity obligations, it
is not possible to estimate the maximum potential exposure.
Except as described in the following sentence, FCX does not
consider any of such obligations as having a probable likelihood
of payment that is reasonably estimable, and accordingly, has not
recorded any obligations associated with these indemnities. With
respect to FCX’s environmental indemnity obligations, any
expected costs from these guarantees are accrued when potential
environmental obligations are considered by management to be
probable and the costs can be reasonably estimated.
NOTE 14. FINANCIAL INSTRUMENTS
FCX does not purchase, hold or sell derivative financial instruments
unless there is an existing asset or obligation, or it anticipates a
future activity that is likely to occur and will result in exposure to
market risks, which FCX intends to offset or mitigate. FCX does
not enter into any derivative financial instruments for speculative
purposes, but has entered into derivative financial instruments in
limited instances to achieve specific objectives. These objectives
principally relate to managing risks associated with commodity
price changes, foreign currency exchange rates and interest rates.
Commodity Contracts. From time to time, FCX has entered into
derivatives contracts to hedge the market risk associated with
fluctuations in the prices of commodities it purchases and sells.
As a result of the acquisition of the oil and gas business in 2013,
FCX assumed a variety of crude oil and natural gas commodity
derivatives to hedge the exposure to the volatility of crude oil and
natural gas commodity prices. Derivative financial instruments
used by FCX to manage its risks do not contain credit risk-related
contingent provisions. As of December 31, 2015 and 2014, FCX
had no price protection contracts relating to its mine production.
A discussion of FCX’s derivative contracts and programs follows.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Derivatives Designated as Hedging Instruments — Fair Value Hedges
Copper Futures and Swap Contracts. Some of FCX’s U.S. copper
rod customers request a fixed market price instead of the COMEX
average copper price in the month of shipment. FCX hedges this
price exposure in a manner that allows it to receive the COMEX
average price in the month of shipment while the customers pay
the fixed price they requested. FCX accomplishes this by entering
into copper futures or swap contracts. Hedging gains or losses
from these copper futures and swap contracts are recorded in
revenues. FCX did not have any significant gains or losses during
the three years ended December 31, 2015, resulting from hedge
ineffectiveness. At December 31, 2015, FCX held copper futures
and swap contracts that qualified for hedge accounting for
64 million pounds at an average contract price of $2.29 per pound,
with maturities through September 2017.
A summary of (losses) gains recognized in revenues for
derivative financial instruments related to commodity contracts
that are designated and qualify as fair value hedge transactions,
along with the unrealized gains (losses) on the related hedged
item for the years ended December 31 follows:
2015 2014 2013
Copper futures and swap contracts:
Unrealized (losses) gains:
Derivative financial instruments $ (3) $ (12) $ 1
Hedged item – firm sales commitments 3 12 (1)
Realized losses:
Matured derivative financial instruments (34) (9) (17)
Derivatives Not Designated as Hedging Instruments
Embedded Derivatives. As described in Note 1 under “Revenue
Recognition,” certain FCX copper concentrate, copper cathode
and gold sales contracts provide for provisional pricing primarily
based on the LME copper price or the COMEX copper price and
the London gold price at the time of shipment as specified in the
contract. Similarly, FCX purchases copper under contracts that
provide for provisional pricing. Mark-to-market price fluctuations
from these embedded derivatives are recorded through the
settlement date and are reflected in revenues for sales contracts
and in cost of sales as production and delivery costs for purchase
contracts. A summary of FCX’s embedded derivatives at
December 31, 2015, follows:
Average Price
Per Unit
Open Maturities
Positions Contract Market Through
Embedded derivatives in
provisional sales contracts:
Copper (millions of pounds) 738 $ 2.22 $ 2.13 July 2016
Gold (thousands of ounces) 215 1,071 1,062 March 2016
Embedded derivatives in
provisional purchase contracts:
Copper (millions of pounds) 99 2.16 2.14 April 2016
2015 ANNUAL REPORT 115
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FINANCIAL STATEMENTS
Crude Oil and Natural Gas Contracts. As a result of the acquisition
of the oil and gas business, FCX had derivative contracts that
consisted of crude oil options, and crude oil and natural gas swaps.
These derivatives were not designated as hedging instruments
and were recorded at fair value with the mark-to-market gains and
losses recorded in revenues. The crude oil options were entered
into by PXP to protect the realized price of a portion of expected
future sales in order to limit the effects of crude oil price
decreases. The remaining contracts matured in 2015, and FCX
had no outstanding crude oil or natural gas derivative contracts
as of December 31, 2015.
Copper Forward Contracts. Atlantic Copper, FCX’s wholly owned
smelting and refining unit in Spain, enters into copper forward
contracts designed to hedge its copper price risk whenever its
physical purchases and sales pricing periods do not match. These
economic hedge transactions are intended to hedge against
changes in copper prices, with the mark-to-market hedging gains
or losses recorded in cost of sales. At December 31, 2015,
Atlantic Copper held net copper forward purchase contracts for
six million pounds at an average contract price of $2.10 per
pound, with maturities through February 2016.
Summary of (Losses) Gains. A summary of the realized and
unrealized (losses) gains recognized in (loss) income before
income taxes and equity in affiliated companies’ net (losses)
earnings for commodity contracts that do not qualify as hedge
transactions, including embedded derivatives, for the years
ended December 31 follows:
2015 2014 2013
Embedded derivatives in
provisional copper and gold
sales contracts a $ (439) $ ( 289) $ (136)
Crude oil options and swaps a 87 513 (344)
Natural gas swaps a — (8) 10
Copper forward contractsb (15) (4) 3
a. Amounts recorded in revenues.
b. Amounts recorded in cost of sales as production and delivery costs.
116
Unsettled Derivative Financial Instruments
A summary of the fair values of unsettled commodity derivative
financial instruments follows:
December 31, 2015 2014
Commodity Derivative Assets:
Derivatives designated as hedging instruments:
Copper futures and swap contractsa $ 1 $ —
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional copper and
gold sales/purchase contracts 21 15
Crude oil optionsb — 316
Total derivative assets $ 22 $ 331
Commodity Derivative Liabilities:
Derivatives designated as hedging instruments:
Copper futures and swap contractsa $ 11 $ 7
Derivatives not designated as hedging instruments:
Embedded derivatives in provisional copper and
gold sales/purchase contracts 82 93
Total derivative liabilities $ 93 $ 100
a. FCX had paid $10 million to brokers at December 31, 2015 and 2014, for margin
requirements (recorded in other current assets).
b. Includes $210 million at December 31, 2014, for deferred premiums and accrued interest.
FCX’s commodity contracts have netting arrangements with
counterparties with which the right of offset exists, and it is FCX’s
policy to offset balances by counterparty on the balance sheet.
FCX’s embedded derivatives on provisional sales/purchases are
netted with the corresponding outstanding receivable/payable
balances. A summary of these unsettled commodity contracts
that are offset in the balance sheet follows:
Assets Liabilities
December 31, 2015 2014 2015 2014
Gross amounts recognized:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts $ 2 1 $ 15 $ 82 $ 93
Crude oil derivatives — 316 — —
Copper derivatives 1 — 11 7
22 331 93 100
Less gross amounts of offset:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts 6 1 6 1
Crude oil derivatives — — — —
Copper derivatives 1 — 1 —
7 1 7 1
Net amounts presented in balance sheet:
Commodity contracts:
Embedded derivatives in provisional
sales/purchase contracts 15 14 76 92
Crude oil derivatives — 316 — —
Copper derivatives — — 10 7
$ 15 $ 3 30 $ 86 $ 99
Balance sheet classification:
Trade accounts receivable $ 10 $ 5 $ 52 $ 56
Other current assets — 316 — —
Accounts payable and accrued liabilities 5 9 34 43
$ 15 $ 3 30 $ 86 $ 99
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Credit Risk. FCX is exposed to credit loss when financial institutions
with which FCX has entered into derivative transactions
(commodity, foreign exchange and interest rate swaps) are unable
to pay. To minimize the risk of such losses, FCX uses counterparties
that meet certain credit requirements and periodically reviews the
creditworthiness of these counterparties. FCX does not anticipate
that any of the counterparties it deals with will default on their
obligations. As of December 31, 2015, the maximum amount
of credit exposure associated with derivative transactions was
$45 million.
Other Financial Instruments. Other financial instruments include
cash and cash equivalents, accounts receivable, restricted cash,
investment securities, legally restricted funds, accounts payable
and accrued liabilities, dividends payable and long-term debt. The
carrying value for cash and cash equivalents (which included time
deposits of $34 million at December 31, 2015, and $48 million at
December 31, 2014), accounts receivable, restricted cash,
accounts payable and accrued liabilities, and dividends payable
approximates fair value because of their short-term nature and
generally negligible credit losses (refer to Note 15 for the fair
values of investment securities, legally restricted funds and
long-term debt).
NOTE 15. FAIR VALUE MEASUREMENT
Fair value accounting guidance includes a hierarchy that
prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level 1 inputs) and the lowest priority to unobservable inputs
(Level 3 inputs).
FCX recognizes transfers between levels at the end of the
reporting period. FCX did not have any significant transfers in or
out of Level 1, 2 or 3 for 2015. A summary of the carrying amount
and fair value of FCX’s financial instruments, other than cash and
cash equivalents, accounts receivable, restricted cash, accounts
payable and accrued liabilities, and dividends payable follows:

At December 31, 2015
Carrying Fair Value
Amount Total Level 1 Level 2 Level 3

Assets
Investment securities:a,b
U.S. core fixed income fund $
23 $
23 $
— $ 23 $
—
Money market funds 21 21 21 — —
Equity securities 3 3 3 — —
Total 47 47 24 23 —
Legally restricted funds:a,b,c,d
U.S. core fixed income fund 52 52
— 52
—
Government bonds and notes 37 37
— 37
—
Government mortgage-backed securities 28 28
— 28
—
Corporate bonds 26 26
— 26
—
Asset-backed securities 13 13
— 13
—
Collateralized mortgage-backed securities 7 7
— 7
—
Money market funds 7 7 7 — —
Municipal bonds 1 1
— 1
—
Total 171
171 7
164
—
Derivatives:a,e
Embedded derivatives in provisional sales/purchase contracts
in a gross asset position 21 21
— 21
—
Copper futures and swap contracts 1 1 1 — —
Total 22 22 1 21
—
Total assets $ 240 $ 32 $ 208 $ —
Liabilities
Derivatives:a,e
Embedded derivatives in provisional sales/purchase contracts
in a gross liability position $
82 $
82 $
— $ 82 $
—
Copper futures and swap contracts 11 11 7 4 —
Total 93 93 7 86 —
Long-term debt, including current portionf
20,428
13,987
—
13,987
—
Total liabilities $ 14,080 $ 7 $ 14,073 $ —

2015 ANNUAL REPORT 117

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

At December 31, 2014

Carrying Fair Value
Amount Total Level 1 Level 2 Level 3

Assets
Investment securities:a,b
U.S. core fixed income fund $ 23 $ 23 $ — $ 23 $ —
Money market funds 20 20 20 — —
Equity securities 3 3 3 — —
Total 46 46 23 23 —
Legally restricted funds:a,b,c,d
U.S. core fixed income fund 52 52 — 52 —
Government bonds and notes 39 39 — 39 —
Corporate bonds 27 27 — 27 —
Government mortgage-backed securities 19 19 — 19 —
Asset-backed securities 17 17 — 17 —
Money market funds 11 11 11 — —
Collateralized mortgage-backed securities 6 6 — 6 —
Municipal bonds 1 1 — 1 —
Total 172 172 11 161 —
Derivatives:a,e
Embedded derivatives in provisional sales/purchase contracts
in a gross asset position 15 15 — 15 —
Crude oil options 316 316 — — 316
Total 331 331 — 15 316
Total assets $ 549 $
34 $ 199 $
316
Liabilities
Derivatives:a,e
Embedded derivatives in provisional sales/purchase contracts
in a gross liability position $ 93 $ 93 $ — $ 93 $ —
Copper futures and swap contracts 7 7 6 1 —
Total 100 100 6 94 —
Long-term debt, including current portionf
18,849
18,735
—
18,735
—
Total liabilities $
18,835 $
6 $
18,829 $
—
a. Recorded at fair value. 
b. Current portion included in other current assets and long-term portion included in other assets.
c. Excludes time deposits (which approximated fair value) included in other assets of $118 million at December 31, 2015, and $115 million at December 31, 2014, associated with an
assurance bond to support PT-FI’s commitment for smelter development in Indonesia (refer to Note 13 for further discussion).
d. Excludes time deposits (which approximated fair value) included in other current assets of $28 million at December 31, 2015, and $17 million at December 31, 2014.
e. Refer to Note 14 for further discussion and balance sheet classifications. Crude oil options are net of $210 million at December 31, 2014, for deferred premiums and accrued interest.
f. Recorded at cost except for debt assumed in acquisitions, which are recorded at fair value at the respective acquisition dates.

118

Valuation Techniques
Money market funds are classified within Level 1 of the fair value
hierarchy because they are valued using quoted market prices in
active markets.
The U.S. core fixed income fund is valued at net asset value.
The fund strategy seeks total return consisting of income and
capital appreciation primarily by investing in a broad range of
investment-grade debt securities, including U.S. government
obligations, corporate bonds, mortgage-backed securities,
asset-backed securities and money market instruments. There are
no restrictions on redemptions (usually within one business day
of notice) and, as such, this fund is classified within Level 2 of the
fair value hierarchy.
Fixed income securities (government securities, corporate
bonds, asset-backed securities, collateralized mortgage-backed
securities and municipal bonds) are valued using a bid-evaluation
price or a mid-evaluation price. A bid-evaluation price is an
estimated price at which a dealer would pay for a security. A
mid-evaluation price is the average of the estimated price at
which a dealer would sell a security and the estimated price at
which a dealer would pay for a security. These evaluations are
based on quoted prices, if available, or models that use observable
inputs and, as such, are classified within Level 2 of the fair
value hierarchy.
Equity securities are valued at the closing price reported on the
active market on which the individual securities are traded and, as
such, are classified within Level 1 of the fair value hierarchy.
FCX’s embedded derivatives on provisional copper concentrate,
copper cathode and gold purchases and sales are valued using
only quoted monthly LME or COMEX copper forward prices and
the London gold forward price at each reporting date based on
the month of maturity (refer to Note 14 for further discussion);
however, FCX’s contracts themselves are not traded on an
exchange. As a result, these derivatives are classified within Level 2
of the fair value hierarchy.
FCX’s derivative financial instruments for crude oil options were
valued using an option pricing model, which used various inputs
including Intercontinental Exchange Holdings, Inc. crude oil prices,
volatilities, interest rates and contract terms. Valuations were
adjusted for credit quality, using the counterparties’ credit quality
for asset balances and FCX’s credit quality for liability balances
(which considers the impact of netting agreements on counterparty
credit risk, including whether the position with the counterparty is a
net asset or net liability). For asset balances, FCX used the credit
default swap value for counterparties when available or the spread
between the risk-free interest rate and the yield rate on the
counterparties’ publicly traded debt for similar instruments. The
crude oil options were classified within Level 3 of the fair value
hierarchy because the inputs used in the valuation models were not
observable for the full term of the instruments. Refer to Note 14 for
further discussion of these derivative financial instruments.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
FCX’s derivative financial instruments for copper futures and
swap contracts and copper forward contracts that are traded on
the respective exchanges are classified within Level 1 of the fair
value hierarchy because they are valued using quoted monthly
COMEX or LME prices at each reporting date based on the month
of maturity (refer to Note 14 for further discussion). Certain of
these contracts are traded on the over-the-counter market and are
classified within Level 2 of the fair value hierarchy based on
COMEX and LME forward prices.
Long-term debt, including current portion, is valued using
available market quotes and, as such, is classified within Level 2
of the fair value hierarchy.
The techniques described above may produce a fair value
calculation that may not be indicative of net realizable value or
reflective of future fair values. Furthermore, while FCX believes its
valuation techniques are appropriate and consistent with other
market participants, the use of different techniques or
assumptions to determine fair value of certain financial
instruments could result in a different fair value measurement at
the reporting date. There have been no changes in the techniques
used at December 31, 2015.
A summary of the changes in the fair value of FCX’s Level 3
instruments, crude oil options, for the years ended December 31
follows:
2015 2014 2013
Balance at beginning of year $ 316 $ (309) $ —
Crude oil options assumed in the
PXP acquisition — — (83)
Net realized gains (losses) a 86 (42) (38)
Net unrealized gains (losses) related
to assets and liabilities still held
at the end of the year b — 430 (230)
Net settlementsc (402) 237 42
Balance at the end of the year $ — $ 316 $ (309)
a. Includes net realized gains (losses) of $87 million recorded in revenues in 2015,
$(41) million in 2014 and $(37) million in 2013, and $(1) million of interest expense
associated with deferred premiums in 2015, 2014 and 2013.
b. Includes unrealized gains (losses) recorded in revenues of $432 million in 2014 and
$(228) million in 2013, and $(2) million of interest expense associated with deferred
premiums in 2014 and 2013.
c. Includes interest payments of $4 million in 2015, $5 million in 2014 and $1 million
in 2013.
Refer to Notes 1 and 5 for a discussion of the fair value estimates
utilized in the impairment assessments for mining operations,
which were determined based on inputs not observable in
the market and thus represent Level 3 measurements. Refer to
Note 2 for the levels within the fair value hierarchy associated with
other assets acquired, liabilities assumed and redeemable
noncontrolling interest related to PXP and MMR acquisitions, and
the goodwill impairment.
2015 ANNUAL REPORT 119
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

NOTE 16. BUSINESS SEGMENT INFORMATION Consolidated revenues include sales to the noncontrolling

Product Revenue. FCX revenues attributable to the products it interest owners of FCX’s South America mining operations

produced for the years ended December 31 follow:
2015 2014 2013
Refined copper products $ 7,790 $ 9,451 $ 9,178
Copper in concentratea 2,869 3,366 5,328
Gold 1,538 1,584 1,656
Molybdenum 783 1,207 1,110
Oil 1,694 4,233 2,310
Other 1,203 1,597 1,339
Total $ 15,877 $ 21,438 $ 2 0,921
a. Amounts are net of treatment and refining charges totaling $485 million in 2015,
$374 million in 2014 and $400 million in 2013.
Geographic Area. Information concerning financial data by
geographic area follows:
December 31, 2015 2014 2013
Long-lived assets: a
U.S. $ 16,569 b $ 2 9,468 $ 3 2,969
Indonesia 7,701 6,961 5,799
Peru 8,432 6,848 5,181
DRC 4,196 4,071 3,994
Chile 1,387 1,542 c 2,699
Other 510 522 562
Total $ 3 8,795 $ 4 9,412 $ 51,204
a. Long-lived assets exclude deferred tax assets, intangible assets and goodwill.
b. Decreased from 2014 primarily because of impairment charges related to oil and gas
properties (refer to Note 1 for further discussion).
c. Decreased from 2013 primarily because of the sale of the Candelaria and Ojos del
Salado mines.
totaling $1.0 billion in 2015, $1.6 billion in 2014 and $2.0 billion in
2013, and PT-FI’s sales to PT Smelting totaling $1.1 billion in 2015,
$1.8 billion in 2014 and $1.7 billion in 2013.
Labor Matters. As of December 31, 2015, 48 percent of FCX’s
labor force was covered by collective bargaining agreements, and
4 percent of FCX’s labor force is covered by agreements that
expired and are currently being negotiated or will expire within
one year.
Business Segments. FCX has organized its mining operations
into five primary divisions — North America copper mines, South
America mining, Indonesia mining, Africa mining and
Molybdenum mines, and operating segments that meet certain
thresholds are reportable segments. For oil and gas operations,
FCX determines its operating segments on a country-by-country
basis. Separately disclosed in the following tables are FCX’s
reportable segments, which include the Morenci, Cerro Verde,
Grasberg and Tenke Fungurume copper mines, the Rod & Refining
operations and the U.S. Oil & Gas operations. FCX’s U.S. Oil & Gas
operations reflect the results of FM O&G beginning June 1, 2013.
Intersegment sales between FCX’s mining operations are based
on similar arm’s-length transactions with third parties at the time
of the sale. Intersegment sales may not be reflective of the actual
prices ultimately realized because of a variety of factors, including
additional processing, timing of sales to unaffiliated customers
and transportation premiums.
FCX defers recognizing profits on sales from its mines to other
divisions, including Atlantic Copper (FCX’s wholly owned smelter

Years Ended December 31, 2015 2014 2013

and refinery in Spain) and on 25 percent of PT-FI’s sales to
PT Smelting (PT-FI’s 25-percent-owned smelter and refinery in
Revenues: a
Indonesia), until final sales to third parties occur. Quarterly
U.S. $ 6,842 $ 10,311 $ 9,331
Japan 1,246 1,573 2,125 variations in ore grades, the timing of intercompany shipments
Indonesia 1,054 1,792 1,651 and changes in product prices result in variability in FCX’s net
Switzerland 1,026 973 1,307 deferred profits and quarterly earnings.
Spain 960 1,020 1,056 FCX allocates certain operating costs, expenses and capital
China 760 892 1,048
expenditures to its operating divisions and individual segments.
India 532 292 431
Singapore 432 562 119 However, not all costs and expenses applicable to an operation
Chile 397 687 754 are allocated. U.S. federal and state income taxes are recorded
Turkey 345 484 334 and managed at the corporate level (included in corporate, other
Egypt 272 365 296 and eliminations), whereas foreign income taxes are recorded
Korea 207 241 198
and managed at the applicable country level. In addition, most
Other 1,804 2,246 2,271
Total $ 15,877 $ 2 1,438 $ 2 0,921 mining exploration and research activities are managed on
a consolidated basis, and those costs along with some selling,
a. Revenues are attributed to countries based on the location of the customer.
general and administrative costs are not allocated to the
Major Customers and Affiliated Companies. Oil and gas sales to operating divisions or individual segments. Accordingly, the
Phillips 66 Company totaled $1.1 billion (7 percent of FCX’s following segment information reflects management
consolidated revenues) in 2015 and $2.5 billion (12 percent of determinations that may not be indicative of what the actual
FCX’s consolidated revenues) in 2014. No other customer financial performance of each operating division or segment
accounted for 10 percent or more of FCX’s consolidated revenues would be if it was an independent entity.
during the three years ended December 31, 2015.

120
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

North America Copper Mines. FCX has seven operating copper At times these operations refine copper and produce copper rod
mines in North America — Morenci, Bagdad, Safford, Sierrita and and shapes for customers on a toll basis. Toll arrangements
Miami in Arizona, and Tyrone and Chino in New Mexico. The require the tolling customer to deliver appropriate copper-bearing
North America copper mines include open-pit mining, sulfide ore material to FCX’s facilities for processing into a product that is
concentrating, leaching and SX/EW operations. A majority of the returned to the customer, who pays FCX for processing its material
copper produced at the North America copper mines is cast into into the specified products.
copper rod by FCX’s Rod & Refining operations. In addition to Atlantic Copper Smelting & Refining. Atlantic Copper smelts and
copper, certain of FCX’s North America copper mines also refines copper concentrate and markets refined copper and
produce molybdenum concentrate and silver. precious metals in slimes. During 2015, Atlantic Copper purchased
The Morenci open-pit mine, located in southeastern Arizona, approximately 23 percent of its concentrate requirements from
produces copper cathode and copper concentrate. In addition to the North America copper mines, approximately 3 percent
copper, the Morenci mine also produces molybdenum from the South America mining operations and approximately
concentrate. The Morenci mine produced 46 percent of FCX’s 3 percent from the Indonesia mining operations at market prices,
North America copper during 2015. with the remainder purchased from third parties.
South America Mining. South America mining includes two Other Mining & Eliminations. Other mining and eliminations
operating copper mines — Cerro Verde in Peru and El Abra include the Miami smelter (a smelter at FCX’s Miami, Arizona,
in Chile. These operations include open-pit mining, sulfide ore mining operation), Freeport Cobalt (a cobalt chemical refinery in
concentrating, leaching and SX/EW operations. Kokkola, Finland), molybdenum conversion facilities in the U.S.
On November 3, 2014, FCX completed the sale of its 80 percent and Europe, four non-operating copper mines in North America
ownership interests in the Candelaria mine and the Ojos del (Ajo, Bisbee and Tohono in Arizona, and Cobre in New Mexico)
Salado mine, both reported as components of other South America and other mining support entities.
mines. South America mining includes the results of the U.S. Oil & Gas Operations. FCX’s U.S. Oil & Gas operations
Candelaria and Ojos del Salado mines through the sale date. Refer include oil and natural gas assets in the Deepwater GOM, onshore
to Note 2 for further discussion. and offshore California, the Haynesville shale in Louisiana, the
The Cerro Verde open-pit copper mine, located near Arequipa, Madden area in central Wyoming and a position in the Inboard
Peru, produces copper cathode and copper concentrate. In Lower Tertiary/Cretaceous natural gas trend onshore in South
addition to copper, the Cerro Verde mine also produces Louisiana. All of the U.S. operations are considered one operating
molybdenum concentrate and silver. The Cerro Verde mine and reportable segment.
produced 63 percent of FCX’s South America copper during 2015.
Indonesia Mining. Indonesia mining includes PT-FI’s Grasberg
minerals district that produces copper concentrate, which
contains significant quantities of gold and silver.
Africa Mining. Africa mining includes the Tenke minerals
district. The Tenke operation includes surface mining, leaching
and SX/EW operations and produces copper cathode. In addition
to copper, the Tenke operation produces cobalt hydroxide.
Molybdenum Mines. Molybdenum mines include the wholly
owned Henderson underground mine and Climax open-pit mine
in Colorado. The Henderson and Climax mines produce high-
purity, chemical-grade molybdenum concentrate, which is
typically further processed into value-added molybdenum
chemical products.
Rod & Refining. The Rod & Refining segment consists of copper
conversion facilities located in North America, and includes a
refinery, three rod mills and a specialty copper products facility,
which are combined in accordance with segment reporting
aggregation guidance. These operations process copper
produced at FCX’s North America copper mines and purchased
copper into copper cathode, rod and custom copper shapes.

2015 ANNUAL REPORT 121

 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Financial Information by Business Segment

Mining Operations
North America Copper Mines South America Indonesia Africa

Atlantic
Copper Other U.S. Corporate,
Other Cerro Other Molybdenum Rod & Smelting Mining & Total Oil & Gas Other & FCX
Morenci Mines Total Verde Mines Total Grasberg Tenke Mines Refining & Refining Eliminations Mining Operations Eliminations Total

Year Ended December 31, 2015

Revenues:
Unaffiliated customers $ 558 $ 351 $ 909 $ 2,617 $ 1,270 $ — $ 4,125 $ 1,955 $ 1,133 a $ 13,882 $ 1,994b $
1,065 $ 808 $ 1,873 $ 1 $ 15,877
Intersegment 1,646 2,571 4,217 68 (7)c 61 36 114 348 29 15 (4,820) — — — —
Production and delivery d,e 1,523 2,276 3,799 815 623 1,438 1,808 860 312 4,129 1,848 (3,859) 10,335 1,211 (1) 11,545
Depreciation, depletion and
amortization 217 343 560 219 133 352 293 257 97 9 39 72 1,679 1,804 14 3,497
Impairment of oil and gas properties — — — — — — — — — — — — — 12,980 164f 13,144
Copper and molybdenum inventory
adjustments — 142 142 — 73 73 — — 11 — — 112 338 — — 338
Selling, general and administrative
expenses 3 3 6 3 1 4 103 11 — — 16 20 160 188 221 569
Mining exploration and research
expenses — 7 7 — — — — — — — — 120 127 — — 127
Environmental obligations and
shutdown costs — 3 3 — — — — — — — — 74 77 — 1 78
Net gain on sales of assets — (39) (39) — — — — — — — — — (39) — — (39)
Operating income (loss) 461 187 648 96 (29) 67 449 256 (72) 16 67 (226) 1,205 (14,189) (398) (13,382)
Interest expense, net 2 2 4 16 — 16 — — — — 10 75 105 186 354 645
Provision for (benefit from)
income taxes — — — 13 (9) 4 195 48 — — — — 247 — (2,182) (1,935)
Total assets at December 31, 2015 3,567 4,878 8,445 9,445 1,661 11,106 9,402 5,079 1,999 219 612 1,293 38,155 8,141 281 46,577
Capital expenditures 253 102 355 1,674 48 1,722 913 229 13 4 23 47 3,306 2,948 g 99 6,353

a. Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North and South America
copper mines.
b. Includes net mark-to-market gains associated with crude oil derivative contracts totaling $87 million.
c. Reflects net reductions for provisional pricing adjustments to prior period open sales.
d. Includes impairment, restructuring and other net charges for mining operations totaling $156 million, including $99 million at North America copper mines, $13 million at South America
mines, $11 million at Tenke, $7 million at Molybdenum mines, $3 million at Rod & Refining, $20 million at other mining & eliminations, and $3 million for restructuring at corporate,
other & eliminations.
e. Includes charges at U.S. Oil & Gas operations totaling $188 million primarily for other asset impairments and inventory write-downs, idle/terminated rig costs and prior year non-income tax
assessments at the California properties.
f. Reflects impairment charges for international oil and gas properties primarily related to Morocco.
g. Excludes international oil and gas capital expenditures totaling $100 million, primarily related to the Morocco oil and gas properties, which are included in corporate, other & eliminations.

122
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Mining Operations
North America Copper Mines South America Indonesia Africa

Atlantic
Copper Other U.S. Corporate,
Other Cerro Other Molybdenum Rod & Smelting Mining & Total Oil & Gas Other & FCX
Morenci Mines Total Verde Minesa Total Grasberg Tenke Mines Refining & Refining Eliminations Mining Operationsb Eliminations Total

Year Ended December 31, 2014

Revenues:
Unaffiliated customers $ 364 $ 336 $ 700 $
1,282 $
1,740 $ 3,022 $
2,848 $
1,437 $ — $ 2,391 $ 1,704c $ 16,728 $ 4,710d $ — $ 21,438
4,626 $
Intersegment 1,752 3,164 4,916 206 304 510 223 121 587 29 21 (6,407) — — — —
Production and delivery 1,287 2,153 3,440 741 1,198 1,939 1,988 770 328 4,633 2,356 (4,795) 10,659 1,237 e 2 11,898
Depreciation, depletion and
amortization 168 316 484 159 208 367 266 228 92 10 41 70 1,558 2,291 14 3,863
Impairment of oil and gas properties — — — — — — — — — — — — — 3,737 — 3,737
Copper and molybdenum inventory
adjustments — — — — — — — — — — — 6 6 — — 6
Selling, general and administrative
expenses 2 3 5 3 3 6 98 12 — — 17 25 163 207 222 592
Mining exploration and research
expenses — 8 8 — — — — — — — — 118 126 — — 126
Environmental obligations and
shutdown costs — (5) (5) — — — — — — — — 123 118 — 1 119
Goodwill impairment — — — — — — — — — — — — 1,717 — 1,717
Net gain on sales of assets — (14) (14) — — — — — — — — (703)f (717) — — (717)
Operating income (loss) 659 1,039 1,698 585 635 1,220 719 548 167 12 (2) 453 4,815 (4,479) (239) 97

Interest expense, net 3 1 4 1 — 1 — — — — 13 84 102 241 287 630

Provision for (benefit from)
income taxes — — — 265 266 531 293 116 — — — 221f 1,161 — (837) 324
Total assets at December 31, 2014 3,780 5,611 9,391 7,490 1,993 9,483 8,626 5,073 2,095 235 898 1,319 37,120 20,834 720 58,674
Capital expenditures 826 143 969 1,691 94 1,785 948 159 54 4 17 52 3,988 3,205 g 22 7,215

Year Ended December 31, 2013

Revenues:
Unaffiliated customers $ 244 $ 326 $ 570 $ 1,473 $ 2,379 $ 3,852 $ 3,751 $1,590 $ — $ 4,995 $ 2,027 $ 1,516c $ 18,301 $ 2,616d $ 4 $
20,921
Intersegment 1,673 2,940 4,613 360 273 633 336 47 522 27 14 (6,192) — — — —
Production and delivery 1,233 2,033 3,266 781 1,288 2,069 2,309 754 317 4,990 2,054 (4,611) 11,148 682 7 11,837
Depreciation, depletion and
amortization 133 269 402 152 194 346 247 246 82 9 42 48 1,422 1,364 11 2,797
Copper and molybdenum inventory
adjustments — — — — — — — — — — — 3 3 — — 3
Selling, general and administrative
expenses 2 3 5 3 4 7 110 12 — — 20 29 183 120 354 657
Mining exploration and research
expenses — 5 5 — — — 1 — — — — 193 199 — 11 210
Environmental obligations and
shutdown costs — (1) (1) — — — — — — — — 67 66 — — 66
Operating income (loss) 549 957 1,506 897 1,166 2,063 1,420 625 123 23 (75)h (405) 5,280 450 (379) 5,351
Interest expense, net 3 1 4 2 1 3 12 2 — — 16 80 117 181 220 518
Provision for income taxes — — — 316 404 720 603 131 — — — — 1,454 — 21i 1,475
Total assets at December 31, 2013 3,110 5,810 8,920 6,584 3,996 10,580 7,437 4,849 2,107 239 1,039 1,003 36,174 26,252 959 63,385
Capital expenditures 737 329 1,066 960 185 1,145 1,030 205 164 4 67 113 3,794 1,436 56 5,286

a. Includes the results of the Candelaria and Ojos del Salado mines prior to their sale in November 2014.
b. Includes the results of Eagle Ford prior to its sale in June 2014.
c. Includes revenues from FCX's molybdenum sales company, which includes sales of molybdenum produced by the Molybdenum mines and by certain of the North and South America
copper mines.
d. Includes net mark-to-market gains (losses) associated with crude oil and natural gas derivative contracts totaling $505 million in 2014 and $(334) million for the period from June 1, 2013,
to December 31, 2013.
e. Includes charges at U.S. Oil & Gas operations totaling $46 million primarily for idle/terminated rig costs and inventory write-downs.
f. Includes the gain and related income tax provision associated with the sale of the Candelaria and Ojos del Salado mines.
g. Excludes international oil and gas capital expenditures totaling $19 million, primarily related to the Morocco oil and gas properties, which are included in corporate, other & eliminations.
h. Includes $50 million for shutdown costs associated with Atlantic Copper's scheduled 68-day maintenance turnaround, which was completed in fourth-quarter 2013.
i. Includes $199 million of net benefits resulting from oil and gas acquisitions.

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FINANCIAL STATEMENTS

NOTE 17. GUARANTOR FINANCIAL STATEMENTS assets of FM O&G LLC are sold to a third party; or (ii) FM O&G

All of the senior notes issued by FCX and discussed in Note 8 are LLC no longer has any obligations under any FM O&G senior

fully and unconditionally guaranteed on a senior basis jointly and notes or any refinancing thereof and no longer guarantees any

severally by FM O&G LLC, as guarantor, which is a 100-percent- obligations of FCX under the revolver, the Term Loan or any other

owned subsidiary of FM O&G and FCX. The guarantee is an senior debt.

unsecured obligation of the guarantor and ranks equal in right of The following condensed consolidating financial information

payment with all existing and future indebtedness of FM O&G LLC, includes information regarding FCX, as issuer, FM O&G LLC, as

including indebtedness under the revolving credit facility. The guarantor, and all other non-guarantor subsidiaries of FCX. Included

guarantee ranks senior in right of payment with all of FM O&G LLC’s are the condensed consolidating balance sheets at December 31,

future subordinated obligations and is effectively subordinated in 2015 and 2014, and the related condensed consolidating statements

right of payment to any debt of FM O&G LLC’s subsidiaries. The of comprehensive (loss) income and the condensed consolidating

indentures provide that FM O&G LLC’s guarantee may be released statements of cash flows for the years ended December 31, 2015,

or terminated for certain obligations under the following 2014 and 2013, which should be read in conjunction with FCX’s notes

circumstances: (i) all or substantially all of the equity interests or to the consolidated financial statements:

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2015
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

ASSETS
Current assets $ 181 $ 3,831 $ 10,982 $ (7,532) $ 7,462
Property, plant, equipment and mining development costs, net 26 57 27,426 — 27,509
Oil and gas properties, net – full cost method:
Subject to amortization, less accumulated amortization — 710 1,552 — 2,262
Not subject to amortization — 1,393 3,432 6 4,831
Investments in consolidated subsidiaries 24,311 — — (24,311) —
Other assets 5,038 1,826 4,447 (6,798) 4,513
Total assets $ 29,556 $ 7,817 $ 47,839 $ (38,635) $ 46,577
LIABILITIES AND EQUITY
Current liabilities $ 6,012 $ 666 $ 5,155 $ (7,526) $ 4,307
Long-term debt, less current portion 14,735 5,883 11,594 (12,433) 19,779
Deferred income taxes 941a — 3,347 — 4,288
Environmental and asset retirement obligations, less current portion — 305 3,434 — 3,739
Investment in consolidated subsidiary — — 2,397 (2,397) —
Other liabilities 40 3,360 1,747 (3,491) 1,656
Total liabilities 21,728 10,214 27,674 (25,847) 33,769
Redeemable noncontrolling interest — — 764 — 764
Equity:
Stockholders’ equity 7,828 (2,397) 15,725 (13,328) 7,828
Noncontrolling interests — — 3,676 540 4,216
Total equity 7,828 (2,397) 19,401 (12,788) 12,044
Total liabilities and equity $ 29,556 $ 7,817 $ 47,839 $ (38,635) $ 46,577
a. All U.S. related deferred income taxes are recorded at the parent company.

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FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2014
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

ASSETS
Current assets $ 323 $ 2,635 $ 8,659 $ (2,572) $ 9,045
Property, plant, equipment and mining development costs, net 22 46 26,152 — 26,220
Oil and gas properties, net – full cost method:
Subject to amortization, less accumulated amortization — 3,296 5,907 (16) 9,187
Not subject to amortization — 2,447 7,640 — 10,087
Investments in consolidated subsidiaries 28,765 6,460 10,246 (45,471) —
Other assets 8,914 3,947 4,061 (12,787) 4,135
Total assets $ 38,024 $ 18,831 $ 62,665 $ (60,846) $ 58,674
LIABILITIES AND EQUITY
Current liabilities $ 1,592 $ 560 $ 5,592 $ (2,572) $ 5,172
Long-term debt, less current portion 14,930 3,874 8,879 (9,312) 18,371
Deferred income taxes 3,161a — 3,237 — 6,398
Environmental and asset retirement obligations, less current portion — 302 3,345 — 3,647
Other liabilities 54 3,372 1,910 (3,475) 1,861
Total liabilities 19,737 8,108 22,963 (15,359) 35,449
Redeemable noncontrolling interest — — 751 — 751
Equity:
Stockholders’ equity 18,287 10,723 35,268 (45,991) 18,287
Noncontrolling interests — — 3,683 504 4,187
Total equity 18,287 10,723 38,951 (45,487) 22,474
Total liabilities and equity $ 38,024 $ 18,831 $ 62,665 $ (60,846) $ 58,674
a. All U.S. related deferred income taxes are recorded at the parent company.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

Year Ended December 31, 2015
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

Revenues $ — $ 613 $ 15,264 $ — $ 15,877

Total costs and expenses 60 5,150a 24,060a (11) 29,259
Operating (loss) income (60) (4,537) (8,796) 11 (13,382)
Interest expense, net (489) (8) (300) 152 (645)
Other income (expense), net 225 1 (81) (139) 6
(Loss) income before income taxes and equity in affiliated companies’
net (losses) earnings (324) (4,544) (9,177) 24 (14,021)
(Provision for) benefit from income taxes (3,227) 1,718 3,453 (9) 1,935
Equity in affiliated companies’ net (losses) earnings (8,685) (9,976) (12,838) 31,496 (3)
Net (loss) income (12,236) (12,802) (18,562) 31,511 (12,089)
Net income and preferred dividends attributable to noncontrolling interests — — (114) (33) (147)
Net (loss) income attributable to common stockholders $ (12,236) $ (12,802) $ (18,676) $ 31,478 $ (12,236)
Other comprehensive income (loss) 41 — 41 (41) 41
Total comprehensive (loss) income $ (12,195) $ (12,802) $ (18,635) $ 31,437 $ (12,195)
a. Includes charges totaling $4.2 billion at the FM O&G LLC guarantor and $8.9 billion at the non-guarantor subsidiaries related to impairment of FCX’s oil and gas properties pursuant to
full cost accounting rules.

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FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Year Ended December 31, 2014
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

Revenues $ — $ 2,356 $ 19,082 $ — $ 21,438

Total costs and expenses 59 3,498a 17,762a 22 21,341
Operating (loss) income (59) (1,142) 1,320 (22) 97
Interest expense, net (382) (139) (189) 80 (630)
Net (loss) gain on early extinguishment of debt (5) 78 — — 73
Other income (expense), net 72 3 41 (80) 36
(Loss) income before income taxes and equity in affiliated companies’
net (losses) earnings (374) (1,200) 1,172 (22) (424)
Benefit from (provision for) income taxes 73 281 (686) 8 (324)
Equity in affiliated companies’ net (losses) earnings (1,007) (3,429) (4,633) 9,072 3
Net (loss) income (1,308) (4,348) (4,147) 9,058 (745)
Net income and preferred dividends attributable to noncontrolling interests — — (519) (44) (563)
Net (loss) income attributable to common stockholders $ (1,308) $ (4,348) $ (4,666) $ 9,014 $ (1,308)
Other comprehensive (loss) income (139) — (139) 139 (139)
Total comprehensive (loss) income $ (1,447) $ (4,348) $ (4,805) $ 9,153 $ (1,447)
a. Includes impairment charges totaling $1.9 billion at the FM O&G LLC Guarantor and $3.5 billion at the non-guarantor subsidiaries related to ceiling test impairment charges for FCX’s
oil and gas properties pursuant to full cost accounting rules and a goodwill impairment charge.

Year Ended December 31, 2013

FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

Revenues $ — $ 1,177 $ 19,744 $ — $ 20,921

Total costs and expenses 134 1,065 14,371 — 15,570
Operating (loss) income (134) 112 5,373 — 5,351
Interest expense, net (319) (129) (129) 59 (518)
Net (loss) gain on early extinguishment of debt (45) — 10 — (35)
Gain on investment in MMR 128 — — — 128
Other income (expense), net 61 — (15) (59) (13)
(Loss) income before income taxes and equity in affiliated companies’
net earnings (losses) (309) (17) 5,239 — 4,913
Benefit from (provision for) income taxes 81 17 (1,573) — (1,475)
Equity in affiliated companies’ net earnings (losses) 2,886 281 268 (3,432) 3
Net income (loss) 2,658 281 3,934 (3,432) 3,441
Net income and preferred dividends attributable to noncontrolling interests — — (706) (77) (783)
Net income (loss) attributable to common stockholders $ 2,658 $ 281 $ 3,228 $ (3,509) $ 2,658
Other comprehensive income (loss) 101 — 101 (101) 101
Total comprehensive income (loss) $ 2,759 $ 281 $ 3,329 $ (3,610) $ 2,759

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FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended December 31, 2015
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX

Cash flow from operating activities:

Net (loss) income $ (12,236) $ (12,802) $ (18,562) $ 31,511 $ (12,089)
Adjustments to reconcile net (loss) income to net cash (used in) provided
by operating activities:
Depreciation, depletion and amortization 5 370 3,195 (73) 3,497
Impairment of oil and gas properties — 4,220 8,862 62 13,144
Copper and molybdenum inventory adjustments — — 338 — 338
Other asset impairments, inventory write-downs, restructuring and other — 11 245 — 256
Net gains on crude oil gas derivative contracts — (87) — — (87)
Equity in losses (earnings) of consolidated subsidiaries 8,685 9,976 12,838 (31,496) 3
Other, net (2,127) 2 (90) — (2,215)
Changes in working capital and other tax payments 5,506 (1,428) (3,714) 9 373
Net cash (used in) provided by operating activities (167) 262 3,112 13 3,220
Cash flow from investing activities:
Capital expenditures (7) (847) (5,486) (13) (6,353)
Intercompany loans (1,812) (1,310) — 3,122 —
Dividends from (investments in) consolidated subsidiaries 852 (71) 130 (913) (2)
Other, net (21) (2) 111 21 109
Net cash (used in) provided by investing activities (988) (2,230) (5,245) 2,217 (6,246)
Cash flow from financing activities:
Proceeds from debt 4,503 — 3,769 — 8,272
Repayments of debt (4,660) — (2,017) — (6,677)
Intercompany loans — 2,038 1,084 (3,122) —
Net proceeds from sale of common stock 1,936 — — — 1,936
Cash dividends and distributions paid (605) — (924) 804 (725)
Other, net (19) (71) (18) 88 (20)
Net cash provided by (used in) financing activities 1,155 1,967 1,894 (2,230) 2,786
Net decrease in cash and cash equivalents — (1) (239) — (240)
Cash and cash equivalents at beginning of year — 1 463 — 464
Cash and cash equivalents at end of year $ — $ — $ 224 $ — $ 224

2015 ANNUAL REPORT 127

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FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2014
FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX
Cash flow from operating activities:
Net (loss) income $ (1,308) $ (4,348) $ (4,147) $ 9,058 $ (745)
Adjustments to reconcile net (loss) income to net cash (used in) provided
by operating activities:
Depreciation, depletion and amortization 4 806 3,077 (24) 3,863
Impairment of oil and gas properties and goodwill — 1,922 3,486 46 5,454
Net gains on crude oil and natural gas derivative contracts — (504) — — (504)
Equity in losses (earnings) of consolidated subsidiaries 1,007 3,429 4,633 (9,072) (3)
Other, net (882) (113) (807) — (1,802)
Changes in working capital and other tax payments,
excluding amounts from dispositions 723 (1,750) 395 — (632)
Net cash (used in) provided by operating activities (456) (558) 6,637 8 5,631
Cash flow from investing activities:
Capital expenditures — (2,143) (5,072) — (7,215)
Acquisition of Deepwater GOM interests — — (1,426) — (1,426)
Intercompany loans (1,328) 704 — 624 —
Dividends from (investments in) consolidated subsidiaries 1,221 (130) (2,408) 1,317 —
Net proceeds from sale of Candelaria and Ojos del Salado — — 1,709 — 1,709
Net proceeds from sale of Eagle Ford shale assets — 2,910 — — 2,910
Other, net — 41 180 — 221
Net cash (used in) provided by investing activities (107) 1,382 (7,017) 1,941 (3,801)
Cash flow from financing activities:
Proceeds from debt 7,464 — 1,246 — 8,710
Repayments of debt (5,575) (3,994) (737) — (10,306)
Intercompany loans — 810 (186) (624) —
Cash dividends and distributions paid, and contributions received (1,305) 2,364 (1,463) (1,325) (1,729)
Other, net (21) (3) (2) — (26)
Net cash provided by (used in) financing activities 563 (823) (1,142) (1,949) (3,351)
Net increase (decrease) in cash and cash equivalents — 1 (1,522) — (1,521)
Cash and cash equivalents at beginning of year — — 1,985 — 1,985
Cash and cash equivalents at end of year $ — $ 1 $ 463 $ — $ 464

Year Ended December 31, 2013

FCX FM O&G LLC Non-guarantor Consolidated
Issuer Guarantor Subsidiaries Eliminations FCX
Cash flow from operating activities:
Net income (loss) $ 2,658 $ 281 $ 3,934 $ (3,432) $ 3,441
Adjustments to reconcile net income (loss) to net cash (used in) provided
by operating activities:
Depreciation, depletion and amortization 4 616 2,177 — 2,797
Net losses on crude oil and natural gas derivative contracts — 334 — — 334
Gain on investment in MMR (128) — — — (128)
Equity in (earnings) losses of consolidated subsidiaries (2,886) (281) (265) 3,432 —
Other, net 8 (14) 78 — 72
Changes in working capital and other tax payments,
excluding amounts from acquisitions and dispositions 272 735 (1,384) — (377)
Net cash (used in) provided by operating activities (72) 1,671 4,540 — 6,139
Cash flow from investing activities:
Capital expenditures — (894) (4,392) — (5,286)
Acquisitions, net of cash acquired (5,437) — (4) — (5,441)
Intercompany loans 834 — (162) (672) —
Dividends from (investments in) consolidated subsidiaries 629 — — (629) —
Other, net 15 30 (226) — (181)
Net cash used in investing activities (3,959) (864) (4,784) (1,301) (10,908)
Cash flow from financing activities:
Proceeds from debt 11,260 — 241 — 11,501
Repayments of debt and redemption of MMR preferred stock (4,737) (416) (551) — (5,704)
Intercompany loans — (391) (281) 672 —
Cash dividends and distributions paid (2,281) — (885) 629 (2,537)
Other, net (211) — — — (211)
Net cash provided by (used in) financing activities 4,031 (807) (1,476) 1,301 3,049
Net decrease in cash and cash equivalents — — (1,720) — (1,720)
Cash and cash equivalents at beginning of year — — 3,705 — 3,705
Cash and cash equivalents at end of year $ — $ — $ 1,985 $ — $ 1,985

128
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FINANCIAL STATEMENTS

NOTE 18. SUBSEQUENT EVENTS reasonably expected to close by December 31, 2016, FCX will be

As a result of the downgrade of the credit ratings of FCX debt required to secure the revolving credit facility and Term Loan with

below investment grade, FCX may be required to provide additional a mutually acceptable collateral and guarantee package. The

or alternative forms of financial assurance, such as letters of credit, springing collateral and guarantee trigger will also go into effect,

surety bonds or collateral, related to its ARO and environmental if such asset sales totaling $3.0 billion in aggregate have not

obligations (refer to Note 12 for further discussion). occurred by December 31, 2016.

On February 15, 2016, FCX announced it had entered into a In addition, the mandatory prepayment provision was modified

definitive agreement to sell a 13 percent undivided interest in its to provide that 100 percent (rather than the 50 percent under

Morenci unincorporated joint venture to SMM for $1.0 billion in the December 2015 amendment) of the net proceeds received on

cash. The transaction is subject to customary closing conditions, or prior to December 31, 2016, in excess of the first $1.0 billion

including regulatory approvals, and is expected to close in from asset sales, subject to certain exceptions, must be applied to

mid-2016. FCX expects to record an approximate $550 million repay the Term Loan if the lenders are unsecured and the leverage

gain on the transaction and use losses to offset cash taxes on the ratio (as defined in the amended agreement) is equal to or greater

transaction. Proceeds from the transaction will be used to repay than 6.00x.

borrowings under FCX’s Term Loan and revolving credit facility. The Term Loan and revolving credit facility contain a number

The Morenci unincorporated joint venture is currently owned of negative covenants that, among other things, restrict, subject

85 percent by FCX and 15 percent by Sumitomo. Following to certain exceptions, the ability of FCX’s subsidiaries that are

completion of the transaction, the unincorporated joint venture not borrowers or guarantors to incur additional indebtedness

will be owned 72 percent by FCX, 15 percent by Sumitomo and (including guarantee obligations) and FCX’s ability or the ability

13 percent by an affiliate that is wholly owned by SMM. of FCX’s subsidiaries to: create liens on assets; enter into sale and

On February 26, 2016, FCX reached an agreement to further leaseback transactions; engage in mergers, liquidations and

amend its revolving credit facility and Term Loan. The amendments dissolutions; or sell assets. Many of the exceptions to the subsidiary

to FCX’s revolving credit facility and Term Loan include indebtedness restrictions and the lien restrictions have been

(i) modification of the maximum leverage ratio from 5.90x to 8.00x narrowed significantly through March 31, 2017. In addition, on or

for the quarters ending March 31, 2016, and June 30, 2016, from prior to March 31, 2017, FCX is not permitted to pay dividends

5.75x to 8.00x for the quarter ending September 30, 2016, and on its common stock or make other restricted payments. The

from 5.00x to 6.00x for the quarter ending December 31, 2016; and pricing under the amended Term Loan and revolving credit facility

no changes to 2017 (remains 4.25x) or thereafter (reverts to 3.75x) also changed. If the total leverage ratio is greater than 6.00x, then

and (ii) modification to the minimum interest expense coverage the existing interest rate will be increased by 0.50 percent, with

ratio (ratio of consolidated EBITDAX, as defined in the amended an additional increase of 0.50 percent if the total leverage ratio is

agreements, to consolidated cash interest expense) from 2.50x greater than 7.00x.

to 2.25x. FCX evaluated events after December 31, 2015, and through

The commitment under FCX’s revolving credit facility has been the date the financial statements were issued, and determined

reduced from $4.0 billion to $3.5 billion. any events or transactions occurring during this period that would

A springing collateral and guarantee trigger was also added to require recognition or disclosure are appropriately addressed in

the revolving credit facility and Term Loan. Under this provision, these financial statements.

if FCX has not entered into definitive agreements for asset sales
totaling $3.0 billion in aggregate by June 30, 2016, that are

2015 ANNUAL REPORT 129

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FINANCIAL STATEMENTS

NOTE 19. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

First Second Third Fourth
Quarter Quarter Quarter Quarter Year

2015
Revenuesa $ 4,153 $ 4,248 $ 3,681 $ 3,795 $ 15,877
Operating lossb,c,d (2,963) (2,374) (3,945) (4,100) (13,382)
Net loss (2,406) (1,799) (3,790) (4,094) (12,089)
Net (income) loss and preferred dividends attributable to noncontrolling interests (68) (52) (40) 13 (147)
Net loss attributable to common stockholdersa,b,c,d (2,474) (1,851)e (3,830) (4,081) (12,236)e
Basic net loss per share attributable to common stockholders (2.38) (1.78) (3.58) (3.47) (11.31)
Diluted net loss per share attributable to common stockholdersa,b,c,d (2.38) (1.78)e (3.58) (3.47) (11.31)e
2014
Revenuesf $ 4,985 $ 5,522 $ 5,696 $ 5,235 $ 21,438
Operating income (loss) 1,111 1,153 1,132g,h (3,299)g,h 97g,h
i,j i,j i,j
Net income (loss) 626 660 704 (2,735) (745)i,j
Net income and preferred dividends attributable to noncontrolling interests 116 178 152 117 563
Net income (loss) attributable to common stockholdersf 510 482i,j 552g,h,i,j (2,852)g,h,i,j (1,308)g,h,i,j
Basic net income (loss) per share attributable to common stockholders 0.49 0.46 0.53 (2.75) (1.26)
Diluted net income (loss) per share attributable to common stockholdersf 0.49 0.46i,j 0.53g,h,i,j (2.75)g,h,i,j (1.26)g,h,i,j
a. Includes charges of $48 million ($30 million to net loss attributable to common stockholders or $0.03 per share) in the first quarter, $95 million ($59 million to net loss attributable to
common stockholders or $0.06 per share) in the second quarter, $74 million ($46 million to net loss attributable to common stockholders or $0.04 per share) in the third quarter, $102 million
($63 million to net loss attributable to common stockholders or $0.05 per share) in the fourth quarter and $319 million ($198 million to net loss attributable to common stockholders or
$0.18 per share) for the year for net noncash mark-to-market losses on crude oil derivative contracts.
b. Includes charges of $3.1 billion ($2.4 billion to net loss attributable to common stockholders or $2.31 per share) in the first quarter, $2.7 billion ($2.0 billion to net loss attributable to
common stockholders or $1.90 per share) in the second quarter, $3.7 billion ($3.5 billion to net loss attributable to common stockholders or $3.25 per share) in the third quarter, $3.7 billion
($3.7 billion to net loss attributable to common stockholders or $3.18 per share) in the fourth quarter and $13.1 billion ($11.6 billion to net loss attributable to common stockholders
or $10.72 per share) for the year to reduce the carrying value of oil and gas properties pursuant to full cost accounting rules. Additionally, after-tax impacts to net loss include net tax
charges of $458 million ($0.44 per share) in the first quarter, $305 million ($0.29 per share) in the second quarter, $1.1 billion ($1.07 per share) in the third quarter, $1.4 billion ($1.21 per share)
in the fourth quarter and $3.3 billion ($3.09 per share) for the year to establish a valuation allowance primarily against U.S. federal alternative minimum tax credits and foreign tax
credits, partly offset by a tax benefit related to the impairment of the Morocco oil and gas properties in the third quarter.
c. Includes charges at oil and gas operations of $17 million ($10 million to net loss attributable to common stockholders or $0.01 per share) in the first quarter, $22 million ($14 million to
net loss attributable to common stockholders or $0.01 per share) in the second quarter, $21 million ($13 million to net loss attributable to common stockholders or $0.01 per share) in the
third quarter, $129 million ($81 million to net loss attributable to common stockholders or $0.07 per share) in the fourth quarter and $188 million ($117 million to net loss attributable
to common stockholders or $0.11 per share) for the year for other asset impairments and inventory write-downs, idle/terminated rig costs and prior year non-income tax assessments
related to the California properties.
d. Includes charges of $4 million ($3 million to net loss attributable to common stockholders) in the first quarter, $59 million ($38 million to net loss attributable to common stockholders or
$0.04 per share) in the second quarter, $91 million ($58 million to net loss attributable to common stockholders or $0.05 per share) in the third quarter, $184 million ($118 million to net
loss attributable to common stockholders or $0.10 per share) in the fourth quarter and $338 million ($217 million to net loss attributable to common stockholders or $0.20 per share) for
the year associated with inventory adjustments to copper and molybdenum inventories. Additionally, includes charges at mining operations of $95 million ($58 million to net loss
attributable to common stockholders or $0.05 per share) in the third quarter, $64 million ($38 million to net loss attributable to common stockholders or $0.03 per share) in the fourth quarter
and $156 million ($94 million to net loss attributable to common stockholders or $0.09 per share) for the year associated with impairments, restructuring and other net charges.
e. Includes a gain of $92 million ($0.09 per share) in the second quarter and for the year associated with the net proceeds received from insurance carriers and other third parties related
to the shareholder derivative litigation settlement.
f. Includes credits (charges) of $15 million ($9 million to net income attributable to common stockholders or $0.01 per share) in the first quarter, $(7) million ($(4) million to net income
attributable to common stockholders) in the second quarter, $122 million ($76 million to net income attributable to common stockholders or $0.07 per share) in the third quarter, $497 million
($309 million to net loss attributable to common stockholders or $0.30 per share) in the fourth quarter and $627 million ($389 million to net loss attributable to common stockholders or
$0.37 per share) for the year for net noncash mark-to-market gains (losses) on crude oil and natural gas derivative contracts.
g. Includes charges of $308 million ($192 million to net income attributable to common stockholders or $0.18 per share) in the third quarter, $3.4 billion ($2.1 billion to net loss attributable
to common stockholders or $2.05 per share) in the fourth quarter and $3.7 billion ($2.3 billion to net loss attributable to common stockholders or $2.24 per share) for the year to reduce the
carrying value of oil and gas properties pursuant to full cost accounting rules. Additionally, includes charges at the oil and gas operations in the fourth quarter and for the year of
(i) $1.7 billion ($1.7 billion to net loss attributable to common stockholders or $1.65 per share) for the impairment of the full carrying value of goodwill and (ii) $46 million ($29 million to
net loss attributable to common stockholders or $0.03 per share) for idle/terminated rig costs and inventory write-downs.
h. Includes net gains of $46 million ($31 million to net income attributable to common stockholders or $0.03 per share) in the third quarter, $671 million ($450 million to net loss attributable
to common stockholders or $0.43 per share) in the fourth quarter and $717 million ($481 million to net loss attributable to common stockholders or $0.46 per share) for the year
primarily from the sale of the Candelaria and Ojos del Salado copper mining operations in the fourth quarter (refer to Note 2 for further discussion) and the sale of a metals injection
molding plant in the third quarter.
i. Includes tax charges of $57 million ($0.06 per share) in the second quarter, $5 million in the third quarter, $22 million ($0.02 per share) in the fourth quarter and $84 million ($0.08 per share)
for the year associated with deferred taxes recorded in connection with the allocation of goodwill to the sale of the Eagle Ford shale assets. Additionally, includes net tax charges
(benefit) of $54 million ($7 million attributable to noncontrolling interests and $47 million to net income attributable to common stockholders or $0.04 per share) in the third quarter,
$(17) million ($11 million attributable to noncontrolling interests and $(28) million to net loss attributable to common stockholders or $(0.03) per share) in the fourth quarter and $37 million
($18 million attributable to noncontrolling interests and $19 million to net loss attributable to common stockholders or $0.02 per share) for the year associated with changes in Chilean tax
rules, U.S. federal income tax law and Peruvian tax rules, partially offset by a tax benefit related to changes in U.S. state income tax filing positions.
j. Includes net gains (losses) on early extinguishment of debt totaling $4 million in the second quarter, $17 million ($0.02 per share) in the third quarter, $(18) million ($(0.02) per share) in
the fourth quarter and $3 million for the year. Refer to Note 8 for further discussion.

130

NOTE 20. SUPPLEMENTARY MINERAL RESERVE
INFORMATION (UNAUDITED)
Recoverable proven and probable reserves have been calculated
as of December 31, 2015, in accordance with Industry Guide 7 as
required by the Securities Exchange Act of 1934. FCX’s proven
and probable reserves may not be comparable to similar
information regarding mineral reserves disclosed in accordance
with the guidance in other countries. Proven and probable
reserves were determined by the use of mapping, drilling,
sampling, assaying and evaluation methods generally applied in
the mining industry, as more fully discussed below. The term
“reserve,” as used in the reserve data presented here, means that
part of a mineral deposit that can be economically and legally
extracted or produced at the time of the reserve determination.
The term “proven reserves” means reserves for which (i) quantity
is computed from dimensions revealed in outcrops, trenches,
workings or drill holes; (ii) grade and/or quality are computed
from the results of detailed sampling; and (iii) the sites for
inspection, sampling and measurements are spaced so closely
and the geologic character is sufficiently defined that size, shape,
depth and mineral content of reserves are well established. The
term “probable reserves” means reserves for which quantity and
grade are computed from information similar to that used for
proven reserves but the sites for sampling are farther apart or are
otherwise less adequately spaced. The degree of assurance,
although lower than that for proven reserves, is high enough to
assume continuity between points of observation.
FCX’s reserve estimates are based on the latest available
geological and geotechnical studies. FCX conducts ongoing studies
of its ore bodies to optimize economic values and to manage risk.
FCX revises its mine plans and estimates of proven and probable
mineral reserves as required in accordance with the latest
available studies.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Estimated recoverable proven and probable reserves at
December 31, 2015, were determined using long-term average
prices of $2.00 per pound for copper, $1,000 per ounce for gold
and $10 per pound for molybdenum. For the three-year period
ended December 31, 2015, LME spot copper prices averaged
$2.97 per pound, London PM gold prices averaged $1,276 per
ounce and the weekly average price for molybdenum quoted by
Metals Week averaged $9.45 per pound.
The recoverable proven and probable reserves presented in the
table below represent the estimated metal quantities from which
FCX expects to be paid after application of estimated
metallurgical recovery rates and smelter recovery rates, where
applicable. Recoverable reserves are that part of a mineral deposit
that FCX estimates can be economically and legally extracted or
produced at the time of the reserve determination.
Recoverable Proven and Probable Mineral Reserves
Estimated at December 31, 2015
Coppera Gold Molybdenum
(billion pounds) (million ounces) (billion pounds)
North America 33.5 0.3 2.38
South America 30.8 — 0.67
Indonesiab 28.0 26.8 —
Africa 7.2 — —
Consolidatedc 99.5 27.1 3.05
Net equity interestd 79.3 24.6 2.73
a. Consolidated recoverable copper reserves included 3.8 billion pounds in leach
stockpiles and 1.0 billion pounds in mill stockpiles.
b. Recoverable proven and probable reserves reflect estimates of minerals that can be
recovered through the end of 2041 (refer to Note 13 for discussion of PT-FI’s COW).
c. Consolidated reserves represent estimated metal quantities after reduction for joint
venture partner interests at the Morenci mine in North America and the Grasberg
minerals district in Indonesia (refer to Notes 3 and 18 for further discussion of FCX’s joint
ventures). Excluded from the table above were FCX’s estimated recoverable proven
and probable reserves of 0.87 billion pounds of cobalt at Tenke and 271.2 million ounces
of silver in Indonesia, South America and North America, which were determined using
long-term average prices of $10 per pound for cobalt and $15 per ounce for silver.
d. Net equity interest reserves represent estimated consolidated metal quantities further
reduced for noncontrolling interest ownership (refer to Note 3 for further discussion
of FCX’s ownership in subsidiaries). Excluded from the table above were FCX’s estimated
recoverable proven and probable reserves of 0.49 billion pounds of cobalt at Tenke and
221.6 million ounces of silver in Indonesia, South America and North America.
2015 ANNUAL REPORT 131
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Recoverable Proven and Probable Mineral Reserves

Estimated at December 31, 2015
Average Ore Grade Recoverable Proven and
a
Per Metric Ton Probable Reserves b
Orea Copper Gold Molybdenum
(million Copper Gold Molybdenum (billion (million (billion
metric tons) (%) (grams) (%) pounds) ounces) pounds)

North America
Developed and producing:
Morenci 3,574
0.27 — —c 14.1 — 0.17
c
Bagdad 1,253 0.33 — 0.02 7.6 0.1 0.38
Safford 84 0.43 — — 0.8 — —
Sierrita 2,319 0.23 —c 0.03 10.2 0.1 1.04
Miami — — — — 0.1 — —
Chino 237 0.45 0.02 —c 2.2 0.1 0.01
Tyrone 13 0.42 — — 0.3 — —
Henderson 81 — — 0.17 — — 0.25
Climax 178 — — 0.15 — — 0.55
Undeveloped:
Cobre 79 0.35 — — 0.3 — —
South America
Developed and producing:
Cerro Verde 3,856 0.37 — 0.01 28.2 — 0.67
El Abra 399 0.44 — — 2.6 — —
Indonesiad
Developed and producing:
Deep Mill Level Zone 460 0.89 0.74 — 7.9 8.7 —
Grasberg open pit 129 1.08 1.29 — 2.7 4.5 —
Deep Ore Zone 116 0.56 0.69 — 1.2 2.0 —
Big Gossan 54 2.26 0.99 — 2.5 1.1 —
Undeveloped:
Grasberg Block Cave 962 1.03 0.78 — 18.4 15.6 —
Kucing Liar 395 1.27 1.09 — 9.4 6.4 —
Africa
Developed and producing:
Tenke Fungurume 99 3.19 — — 7.2 — —

Total 100% basis 14,288 115.7 38.6 3.07

Consolidatede 99.5 27.1 3.05

FCX’s equity sharef 79.3 24.6 2.73

a. Excludes material contained in stockpiles.
b. Includes estimated recoverable metals contained in stockpiles.
c. Amounts not shown because of rounding.
d. Recoverable proven and probable reserves reflect estimates of minerals that can be recovered through the end of 2041 (refer to Note 13 for discussion of PT-FI’s COW).
e. Consolidated reserves represent estimated metal quantities after reduction for joint venture partner interests at the Morenci mine in North America and the Grasberg minerals district
in Indonesia. Refer to Notes 3 and 18 for further discussion of FCX’s joint ventures.
f. Net equity interest reserves represent estimated consolidated metal quantities further reduced for noncontrolling interest ownership. Refer to Note 3 for further discussion of FCX’s
ownership in subsidiaries.

132

NOTE 21. SUPPLEMENTARY OIL AND GAS INFORMATION
(UNAUDITED)
Costs Incurred. A summary of the costs incurred for FCX’s oil and
gas acquisition, exploration and development activities for the
years ended December 31 follows:
2015 2014 2013 a
Property acquisition costs:
Proved properties $ — $ 463 $ 12,205 b
Unproved properties 61 1,460 11,259 c
Exploration costs 1,250 1,482 502
Development cost 1,442 1,270 854
$ 2 ,753 $ 4 ,675 $ 2 4,820
a. Includes the results of FM O&G beginning June 1, 2013.
b. Includes $12.2 billion from the acquisitions of PXP and MMR.
c. Includes $11.1 billion from the acquisitions of PXP and MMR.
These amounts included (decreases) increases in AROs of
$(80) million in 2015, $(27) million in 2014 and $1.1 billion in 2013
(including $1.0 billion assumed in the acquisitions of PXP
and MMR), capitalized general and administrative expenses of
$124 million in 2015, $143 million in 2014 and $67 million in 2013,
and capitalized interest of $58 million in 2015, $88 million in
2014 and $69 million in 2013.
Capitalized Costs. The aggregate capitalized costs subject to
amortization for oil and gas properties and the aggregate related
accumulated amortization as of December 31 follow:
2015 2014 2013
Properties subject to amortization $ 24,538 $ 16,547 $ 13,829
Accumulated amortization (22,276)a (7,360) a (1,357)
$ 2,262 $ 9,187 $ 12,472
a. Includes charges of $13.1 billion in 2015 and $3.7 billion in 2014 to reduce the carrying
value of oil and gas properties pursuant to full cost accounting rules.
The average amortization rate per barrel of oil equivalents (BOE)
was $33.46 in 2015, $39.74 in 2014 and $35.54 for the period from
June 1, 2013, to December 31, 2013.
Costs Not Subject to Amortization. A summary of the categories
of costs comprising the amount of unproved properties not
subject to amortization by the year in which such costs were
incurred follows:
Years Ended December 31, Total 2015 2014 2013 a
U.S.:
Onshore
Acquisition costs $ 389 $ 6 $ — $ 383
Exploration costs 8 7 1 —
Capitalized interest 2 2 — —
Offshore
Acquisition costs 4,048 57 1,304 2,687
Exploration costs 331 201 130 —
Capitalized interest 37 25 11 1
International:
Offshore
Acquisition costs 7 — — 7
Exploration costs 7 2 5 —
Capitalized interest 2 1 1 —
$ 4,831 $ 301 $ 1,452 $ 3 ,078
a. Includes the results of FM O&G beginning June 1, 2013.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
FCX expects that 40 percent of the costs not subject to amortization
at December 31, 2015, will be transferred to the amortization base
over the next five years and the majority of the remainder in the
next seven to ten years.
Of the total U.S. net undeveloped acres, 24 percent is covered
by leases that expire from 2016 to 2018. As a result of declining
crude oil prices, FCX’s current plans anticipate that the majority of
the expiring acreage will not be retained by drilling operations or
other means. Currently, FM O&G has a commitment to drill a
second well in Morocco in 2016. However, FM O&G is actively
negotiating with its partners to modify its work program, which, if
successful, would result in changes in the timing, amount or type of
future commitment. The exploration permits covering FM O&G’s
Morocco acreage expire at the end of 2016; however, FM O&G has
the ability, under certain circumstances, to extend the exploration
permits through 2019. Over 95 percent of the acreage in the
Haynesville shale in Louisiana is currently held by production or
held by operations.
Results of Operations for Oil and Gas Producing Activities. The
results of operations from oil and gas producing activities for the
years ended December 31, 2015 and 2014, and the period from
June 1, 2013, to December 31, 2013, presented below exclude
non-oil and gas revenues, general and administrative expenses,
goodwill impairment, interest expense and interest income.
Income tax benefit (expense) was determined by applying the
statutory rates to pre-tax operating results:
Years Ended December 31, June 1, 2013, to
2015 2014 December 31, 2013
Revenues from oil and gas
producing activities $ 1,994 $ 4,710 $ 2,616
Production and delivery costs (1,215) (1,237) (682)
Depreciation, depletion and
amortization (1,772) (2,265) (1,358)
Impairment of oil and gas
properties (13,144) (3,737) —
Income tax benefit (expense)
(based on FCX’s statutory tax rate) 5,368 958 (219)
Results of operations from
oil and gas producing activities $ (8,769) $ (1,571) $ 357
Proved Oil and Natural Gas Reserve Information. The following
information summarizes the net proved reserves of oil (including
condensate and natural gas liquids (NGLs)) and natural gas and
the standardized measure as described below. All of FCX’s oil and
natural gas reserves are located in the U.S.
Management believes the reserve estimates presented herein
are reasonable and prepared in accordance with guidelines
established by the SEC as prescribed in Regulation S-X, Rule 4-10.
However, there are numerous uncertainties inherent in estimating
quantities and values of proved reserves and in projecting future
rates of production and the amount and timing of development
expenditures, including many factors beyond FCX’s control.
Reserve engineering is a subjective process of estimating the
recovery from underground accumulations of oil and natural gas
2015 ANNUAL REPORT 133
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
that cannot be measured in an exact manner, and the accuracy of
any reserve estimate is a function of the quality of available data
and of engineering and geological interpretation and judgment.
Because all oil and natural gas reserve estimates are to some
degree subjective, the quantities of oil and natural gas that are
ultimately recovered, production and operating costs, the amount
and timing of future development expenditures, and future crude
oil and natural gas sales prices may all differ from those assumed
in these estimates. In addition, different reserve engineers may
make different estimates of reserve quantities and cash flows
based upon the same available data. Therefore, the standardized
measure of discounted future net cash flows (Standardized
Measure) shown below represents estimates only and should not
be construed as the current market value of the estimated
reserves attributable to FCX’s oil and gas properties. In this
regard, the information set forth in the following tables includes
revisions of reserve estimates attributable to proved properties
acquired from PXP and MMR, and reflect additional information
from subsequent development activities, production history
of the properties involved and any adjustments in the projected
economic life of such properties resulting from changes in
product prices.
Decreases in the prices of crude oil and natural gas could have
an adverse effect on the carrying value of the proved reserves,
reserve volumes and FCX’s revenues, profitability and cash flows.
FCX’s reference prices for reserve determination are the WTI
spot price for crude oil and the Henry Hub price for natural gas. As
of February 2016, the twelve-month average of the first-day-of-
the-month historical reference price for crude oil has decreased
from $50.28 per barrel at December 31, 2015, to $47.54 per barrel,
while the comparable price for natural gas has decreased from
$2.59 per MMBtu at December 31, 2015, to $2.50 per MMBtu.
The market price for California crude oil differs from the
established market indices in the U.S. primarily because of the
higher transportation and refining costs associated with heavy oil,
which can vary based on global supply and demand, refinery
utilization and inventory levels. Approximately 33 percent of FCX’s
oil and natural gas reserve volumes are attributable to properties
in California where differentials to the reference prices have been
volatile as a result of these factors.
The market price for GOM crude oil differs from WTI as a result
of a large portion of FCX’s production being sold under a Heavy
Louisiana Sweet based pricing. Approximately 59 percent of
FCX’s December 31, 2015, oil and natural gas reserve volumes are
attributable to properties in the GOM where oil price realizations
are generally higher because of these marketing contracts.
Estimated Quantities of Oil and Natural Gas Reserves. The
following table sets forth certain data pertaining to proved,
proved developed and proved undeveloped reserves, all of which
are in the U.S., for the years ended December 31, 2015 and 2014,
and the period from June 1, 2013, to December 31, 2013.
134
Oil Gas Total
(MMBbls)a,b (Bcf) a (MMBOE) a
2015
Proved reserves:
Balance at beginning of year 288 610 390
Extensions and discoveries 11 43 17
Acquisitions of reserves in-place — — —
Revisions of previous estimates (54) (287) (102)
Sale of reserves in-place — (2) —
Production (38)
(90) (53)
Balance at end of year 207 274 252
Proved developed reserves at
December 31, 2015 129 245
169
Proved undeveloped reserves at
December 31, 2015 78
29
83
2014
Proved reserves:
Balance at beginning of year 370 562 464
Extensions and discoveries 10 35 16
Acquisitions of reserves in-place 14 9 16
Revisions of previous estimates (10) 140 13
Sale of reserves in-place (53) (54) (62)
Production (43)
(82)
(57)
Balance at end of year 288 610 390
Proved developed reserves at
December 31, 2014 184 369 246
Proved undeveloped reserves at
December 31, 2014 104 241 144
2013
Proved reserves:
Balance at beginning of year — — —
Acquisitions of PXP and MMR 368 626 472
Extensions and discoveries 20 20 24
Revisions of previous estimates 11 (26) 7
Sale of reserves in-place — (3) (1)
Production (29)
(55) (38)
Balance at end of year 370 562 464
Proved developed reserves at
December 31, 2013 236 423 307
Proved undeveloped reserves at
December 31, 2013 134 139 157
a. MMBbls = million barrels; Bcf = billion cubic feet; MMBOE = million BOE
b. Includes 9 MMBbls of NGL proved reserves (6 MMBbls of developed and 3 MMBbls
of undeveloped) at December 31, 2015, 10 MMBbls of NGL proved reserves
(7 MMBbls of developed and 3 MMBbls of undeveloped) at December 31, 2014, and
20 MMBbls of NGL proved reserves (14 MMBbls of developed and 6 MMBbls of
undeveloped) at December 31, 2013.
For the year ended December 31, 2015, FCX had a total of
17 MMBOE of extensions and discoveries, including 14 MMBOE
in the Deepwater GOM, primarily associated with the continued
successful development of Horn Mountain and 3 MMBOE in the
Haynesville shale resulting from continued successful drilling
that extended and developed FCX’s proved acreage. For the year
ended December 31, 2014, FCX had a total of 16 MMBOE of
extensions and discoveries, including 8 MMBOE in the Deepwater
GOM, primarily associated with the continued successful

development at Horn Mountain and 5 MMBOE in the Haynesville
shale resulting from continued successful drilling that extended
and developed FCX’s proved acreage. From June 1, 2013, to
December 31, 2013, FCX had a total of 24 MMBOE of extensions
and discoveries, including 16 MMBOE in the Eagle Ford shale
resulting from continued successful drilling that extended and
developed FCX’s proved acreage and 5 MMBOE in the Deepwater
GOM, primarily associated with the previously drilled Holstein
Deep development acquired during 2013.
For the year ended December 31, 2015, FCX had net negative
revisions of 102 MMBOE primarily related to lower oil and gas
price realizations. For the year ended December 31, 2014, FCX had
net positive revisions of 13 MMBOE primarily related to improved
gas price realizations in both the Haynesville shale and Madden
field, as well as continued improved performance in the Eagle Ford
shale prior to the disposition, partially offset by the downward
revisions of certain proved undeveloped reserves resulting from
deferred development plans, as well as lower oil price realizations
and higher steam-related operating expenses resulting from
higher natural gas prices at certain onshore California properties.
From June 1, 2013, to December 31, 2013, FCX had net positive
revisions of 7 MMBOE primarily related to improved performance
at certain onshore California and Deepwater GOM properties,
partially offset by performance reductions primarily related to
certain other Deepwater GOM properties and the Haynesville shale.
Excluding the impact of crude oil derivative contracts, the
average realized sales prices used in FCX’s reserve reports
as of December 31, 2015, were $47.80 per barrel of crude oil and
$2.55 per one thousand cubic feet (Mcf) of natural gas. As
of December 31, 2014, the average realized sales prices used in
FCX’s reserve report were $93.20 per barrel of crude oil and
$4.35 per Mcf.
For the year ended December 31, 2014, FCX acquired reserves
in-place totaling 16 MMBOE from the acquisition of interests
in the Deepwater GOM, including interests in the Lucius and
Heidelberg oil fields.
For the year ended December 31, 2014, FCX sold reserves
in-place totaling 62 MMBOE primarily related to its Eagle Ford
shale assets. From June 1, 2013, to December 31, 2013,
FCX sold reserves in-place totaling 1 MMBOE related to its
Panhandle properties.
Standardized Measure. The Standardized Measure (discounted
at 10 percent) from production of proved oil and natural gas
reserves has been developed as of December 31, 2015, 2014 and
2013, in accordance with SEC guidelines. FCX estimated the
quantity of proved oil and natural gas reserves and the future
periods in which they are expected to be produced based on
year-end economic conditions. Estimates of future net revenues
from FCX’s proved oil and gas properties and the present value
thereof were made using the twelve-month average of the
first-day-of-the-month historical reference prices as adjusted for
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
location and quality differentials, which are held constant
throughout the life of the oil and gas properties, except where
such guidelines permit alternate treatment, including the use
of fixed and determinable contractual price escalations (excluding
the impact of crude oil derivative contracts). Future gross
revenues were reduced by estimated future operating costs
(including production and ad valorem taxes) and future
development and abandonment costs, all of which were based
on current costs in effect at December 31, 2015, 2014 and 2013,
and held constant throughout the life of the oil and gas properties.
Future income taxes were calculated by applying the statutory
federal and state income tax rate to pre-tax future net cash flows,
net of the tax basis of the respective oil and gas properties
and utilization of FCX’s available tax carryforwards related to its
oil and gas operations.
The Standardized Measure related to proved oil and natural gas
reserves as of December 31 follows:
2015 2014 2013
Future cash inflows $ 10,536 $ 29,504 $ 38,901
Future production expense (4,768) (10,991) (12,774)
Future development costs a (4,130) (6,448) (6,480)
Future income tax expense — (2,487) (4,935)
Future net cash flows 1,638 9,578 14,712
Discounted at 10% per year (246) (3,157) (5,295)
Standardized Measure $ 1,392 $ 6,421 $ 9,417
a. Includes estimated asset retirement costs of $1.9 billion at December 31, 2015, and
$1.8 billion at December 31, 2014 and 2013.
A summary of the principal sources of changes in the Standardized
Measure for the years ended December 31 follows:
2015 2014 2013 a
Balance at beginning of year $ 6,421 $ 9,417 $ —
Changes during the year:
Reserves acquired in the
acquisitions of PXP and MMR — — 14,467
Sales, net of production expenses (928) (3,062) (2,296)
Net changes in sales and transfer
prices, net of production expenses (7,766) (2,875) (459)
Extensions, discoveries and
improved recoveries 45 194 752
Changes in estimated future
development costs 1,287 (498) (1,190)
Previously estimated development
costs incurred during the year 985 982 578
Sales of reserves in-place — (1,323) (12)
Other purchases of reserves in-place — 487 —
Revisions of quantity estimates (1,170) 399 102
Accretion of discount 797 1,195 701
Net change in income taxes 1,721 1,505 (3,226)
Total changes (5,029) (2,996) 9,417
Balance at end of year $ 1,392 $ 6,421 $ 9,417
a. Includes the results of FM O&G beginning June 1, 2013.
­
2015 ANNUAL REPORT 135
 PERFORMANCE GRAPH

The following graph compares the change in the cumulative
total stockholder return on our common stock with the
cumulative total return of the S&P 500 Stock Index, the S&P 500
Materials Index and the S&P 500 Energy Index from 2011
through 2015. Our comparative peer groups are the S&P 500
Materials Index and the S&P 500 Energy Index, which closely
mirror the benchmarks of other large companies in the materials
and energy sectors. This comparison assumes $100 invested
on December 31, 2010, in (a) Freeport-McMoRan Inc. common
stock, (b) the S&P 500 Stock Index, (c) the S&P 500 Materials
Index and (d) the S&P 500 Energy Index.

Comparison of Cumulative Total Return

Among Freeport-McMoRan Inc., the S&P 500 Index, the S&P Materials Index and the S&P Energy Index

$200

dollars
$100

$0
12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15

December 31,
2010 2011 2012 2013 2014 2015

Freeport-McMoRan Inc. $ 100.00 $ 63.18 $ 60.64 $ 71.90 $ 46.16 $ 13.80

S&P 500 Index 100.00 102.11 118.45 156.82 178.29 180.75

S&P Materials Index 100.00 90.25 103.76 130.32 139.33 127.65

S&P Energy Index 100.00 104.72 109.55 137.01 126.35 99.67

136

INVESTOR INQUIRIES
The Investor Relations Department will be pleased to receive any inquiries
about the company. Our Principles of Business Conduct and our Annual
Report on Form 10-K filed with the Securities and Exchange Commission
(SEC), which includes certifications of our Chief Executive Officer
and Chief Financial Officer, are available on our website. Additionally,
copies will be furnished, without charge, to any stockholder of the
company entitled to vote at the annual meeting, upon written request.
The Investor Relations Department can be contacted as follows:
Freeport-McMoRan Inc.
Investor Relations Department
333 North Central Avenue
Phoenix, AZ 85004
Telephone (602) 366-8400
fcx.com
*R
TRANSFER AGENT
Questions about lost certificates, lost or missing dividend checks,
or notifications of change of address should be directed to
the Freeport-McMoRan transfer agent, registrar and dividend
disbursement agent:
Computershare
250 Royall Street
Canton, MA 02021
Telephone (800) 953-2493
computershare.com/investor
Instant Support https://www-us.computershare.com/investor/Contact
NOTICE OF ANNUAL MEETING
The annual meeting of stockholders will be held June 8, 2016.
Notice of the annual meeting will be sent to stockholders. In
accordance with SEC rules, we will report the voting results of
our annual meeting on a Form 8-K, which will be available on our
website (fcx.com).
FCX COMMON STOCK
FCX’s common stock trades on the New York Stock Exchange
(NYSE) under the symbol “FCX.” The FCX common stock price
is reported daily in the financial press under “FMCG” in most
listings of NYSE securities. As of December 31, 2015, the number
of holders of record of FCX’s common stock was 14,706.
NYSE composite tape common share price ranges during 2015
and 2014 were:
2015 2014
HIGH LOW HIGH LOW
First Quarter $ 23.72 $ 16.43 $ 38.09 $ 30.38
Second Quarter 23.97 18. 1 1 36.5 1 32.35
Third Quarter 18.84 7.76 39.32 32.29
Fourth Quarter 14.20 6.08 32.9 1 20.94
STOCKHOLDER
INFORMATION
COMMON STOCK DIVIDENDS
Below is a summary of dividends on FCX common stock for 2015 and 2014.
2015
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
First Quarter $ 0.3125 Jan. 15, 2015 Feb. 2, 2015
Second Quarter 0.0500 Apr. 15, 2015 May 1, 2015
Special Dividend* 0.1105
0.1105 July 15, 2015 Aug. 3, 2015
Third Quarter 0.0500 July 15, 2015 Aug. 3, 2015
Fourth Quarter 0.0500 Oct. 15, 2015 Nov. 2, 2015
 elated to the settlement of the shareholder derivative litigation.
2014
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
First Quarter $ 0.3125 Jan. 15, 2014 Feb. 3, 2014
Second Quarter 0.3125 Apr. 15, 2014 May 1, 2014
Third Quarter 0.3125 July 15, 2014 Aug. 1, 2014
Fourth Quarter 0.3125 Oct. 15, 2014 Nov. 3, 2014
In December 2015, the Board of Directors suspended the annual common
stock dividend in response to weak conditions in commodity and financial
markets. The Board of Directors will review FCX’s financial policy on an
ongoing basis.
TAX WITHHOLDING –
NONRESIDENT ALIEN STOCKHOLDERS
Nonresident aliens who own stock in a United States corporation are
generally subject to a federal withholding tax on 100 percent of the
dividends paid on preferred and/or common stock. However, when
80 percent or more of a corporation’s income is generated outside
the United States, the withholding percentage is not calculated
on 100 percent of the dividend, but rather on that portion of the
dividend attributable to income generated in the United States.
We have determined that, for quarterly dividends paid in 2015 to
nonresident alien stockholders, 100 percent of the dividend amount
was subject to federal withholding tax.
To the extent dividends are paid in 2016, we estimate that
100 percent of the total dividend amount is subject to federal
withholding tax unless exempted by tax treaty. The withholding tax
rate may also be reduced by tax treaty.
If you have any questions, please contact the Investor Relations
Department.
FCX BENEFICIAL OWNERS
The beneficial owners of more than five percent of our outstanding
common stock as of December 31, 2015, are Icahn Capital LP
(8.8%), Vanguard Group, Inc. (8.5%) and BlackRock, Inc. (7.3%).
2015 ANNUAL REPORT 137
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